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Recent Posts by Kristen Shepley

FASB to Draft Final Leasing Standard Update
Posted by Kristen Shepley on Tue, Dec 1, 2015 @ 09:17 AM

The Financial Accounting Standards Board (FASB) is nearing the end of its deliberations on the proposed Accounting Standards Update to Leases (Topic 842). Part of a joint project with the International Accounting Standards Board (IASB), the FASB's proposed update to Topic 842 would create two models for lease classification, Type A and Type B. The FASB's proposed update would be slightly different from the IASB's, which decided on a single model (Type A) for lessee accounting. In both the FASB's and the IASB's proposed updates, lessor accounting determines the lease classification on the basis of whether the lease is effectively a financing or a sale, rather than an operating lease.

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Topics: FASB

Renewed Audit Focus - Related Parties and Unusual Transactions
Posted by Kristen Shepley on Tue, Mar 17, 2015 @ 09:09 AM

Related party transactions, significant unusual transactions and transactions with a company's executive officers are three critical areas of risk that have been contributing factors in a number of financial reporting frauds over the last several decades. The PCAOB has previously concluded that its existing requirements to audit these areas are not sufficient and are not sufficiently risk-based.
In response, the PCAOB issued, and the SEC has approved Auditing Standard ("AS") No. 18, Related Parties, as well as amendments to existing standards on auditing significant unusual transactions and transactions with a company's executives. These changes may result in additional documentation and scrutiny of these types of transactions by audit firms as they comply with the standard for audits performed under PCAOB standards, including those for publicly traded companies and broker-dealers.

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Topics: audit

Proposed R&D Credit Regulations Would Clarify, Modify Tests for Internal Use Computer Software
Posted by Kristen Shepley on Fri, Mar 13, 2015 @ 09:33 AM

The Treasury and IRS have released proposed regulations governing the credit for increasing research activities (the research and development or R&D credit) with respect to computer software for internal use. The proposal also withdraws a prior advanced notice of proposed rulemaking, and asks for public comments.

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Topics: research and development, internal computer software

2015 Tax Preview: 5 Stories to Watch
Posted by Kristen Shepley on Tue, Mar 10, 2015 @ 09:21 AM

To paraphrase Macbeth, 2014 proved to be full of sound and fury, but signified virtually nothing when it comes to taxes. Both political parties touted comprehensive tax reform on their agendas, but once again, any substantial changes (save for a last minute extenders bill that expired three weeks later) stalled out before the end of the legislative session. Between the results from the 2014 mid-term elections and lingering court rulings, 2015 promises to be more eventful. As we look ahead, here are five tax-related developments that are on the horizon.

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Topics: 2015 Tax preview

Congress Extends Expiring Tax Provisions Through 2014
Posted by Kristen Shepley on Fri, Dec 19, 2014 @ 11:06 AM

On the evening of December 16, the Senate passed the Tax Increase Prevention Act of 2014 ("Extenders Act"), retroactively reinstating many tax breaks that expired at the end of 2013, but only extending those provisions through 2014. The House of Representatives originally passed the Extenders Act on December 3 and, with the Senate's vote, the bill now heads to President Obama, who is expected to sign it. After a year filled with discussions about corporate tax reform and the permanent extension of popular provisions such as the research tax credit, to walk away with only a one-year extension of the expired provisions feels anticlimactic. Taxpayers that were hesitant to take advantage of the tax breaks until they were officially extended will have little time to do so before year end. At least taxpayers and their tax advisors will be able to factor these provisions into their year-end tax projections for their fourth quarter estimate calculations.

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Topics: tax update, tax changes

Recent Developments with the $1 Million Compensation Deduction Limitation
Posted by Kristen Shepley on Fri, Dec 12, 2014 @ 03:08 PM

Public corporations generally cannot deduct more than $1 million in compensation per year for covered employees (i.e., certain key executives). Certain types of compensation, most notably performance-based compensation subject to shareholder approval, are excluded from this limitation. Recent guidance provides insight on several issues, including who are covered employees, whether shareholders actually had the ability to approve performance-based compensation and whether dividends on restricted stock units were subject to the $1 million limitation.

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Topics: compensation deduction limitation

Inflation-Adjusted Figures Released for 2015
Posted by Kristen Shepley on Mon, Nov 24, 2014 @ 09:23 AM

While everyone anxiously awaits the fate of popular tax extenders like bonus depreciation and the increased business expensing election, the IRS and the Social Security Administration have released various inflation-adjusted figures for 2015. While most figures will increase slightly in 2015, some, such as the annual gift exclusion, remain unchanged.

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Topics: tax, tax changes, Inflation-Adjusted, 2015 Tax Rate Tables

An Introduction to the Revenue Recognition 5-Step Process
Posted by Kristen Shepley on Fri, Nov 21, 2014 @ 09:14 AM

In May, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). This has been the highly anticipated standard on revenue recognition that will supersede virtually all revenue recognition guidance currently found in U.S. generally accepted accounting principles (ASC 605, Revenue Recognition (Topic 605)). In addition to superseding Topic 605, Topic 606 will supersede virtually all industry specific guidance found throughout the Industry Topics of the FASB Codification.

While the new guidance may have minimal impact on some entities, the movement away from specific industry guidance is a significant change from current practice where industry guidance has been in use for decades. Additionally, on the surface, it appears that the new guidance contains less complexity than current guidance; however, the new guidance is considerably more principles-based and therefore can require significantly more judgment.

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Topics: Revenue Recognition Standard, FASB

Do You Use Software Provided from the Cloud?
Posted by Kristen Shepley on Tue, Nov 18, 2014 @ 09:31 AM

In August, the Financial Accounting Standards Board (FASB) issued another proposal under its Simplification Initiative to address how an entity should account for payments when it purchases the use of software hosted by a vendor (i.e. cloud computing arrangements). These arrangements are known as a "hosting arrangement," an example of which is the use of web-based Customer Relationship Management (CRM) software or any other web-based software.

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Topics: computer and software services, FASB, Cloud

IRS Announces Newly Modified Offshore Compliance Programs
Posted by Kristen Shepley on Thu, Sep 18, 2014 @ 09:23 AM

The IRS has announced changes in two of its programs related to offshore accounts. The IRS has modified the terms of the Offshore Voluntary Disclosure Program (OVDP), which allows individuals to avoid criminal prosecution if they disclose their foreign accounts and pay a substantial penalty. In addition, the IRS has expanded the streamlined filing compliance process, or "streamlined procedures," which are aimed at U.S. taxpayers who have failed to disclose their foreign accounts but who are not willfully evading their tax obligations. These programs are part of a wider effort to stop offshore tax evasion, which includes enhanced enforcement, criminal prosecutions, and implementation of third-party reporting via the Foreign Account Tax Compliance Act (FATCA).

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Topics: OVDP, Offshore Compliance Programs

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