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CPAJ News Briefs: FASB, IASB, AICPA

FASB News

Proposal that Will Boost Disclosures around Income Taxes Companies Pay in United States, Overseas

FASB has proposed a package of income tax disclosure rules that will require companies to provide more transparency about their exposure to changes in tax legislation and the global tax risk they may face. The rules were developed to address concerns that current income tax disclosures do not provide investors with sufficient information to understand the tax provision for a company that operates in multiple jurisdictions, the board said. The most significant items proposed are changes to disclosures related to amounts paid for taxes and the rate reconciliation. If finalized, companies will be required to break out amounts paid for taxes between federal, state, and foreign taxing jurisdictions, rather than just disclosing a lump sum amount. Similarly, the rate reconciliation will require disaggregation into eight specific categories, with these categories further disaggregated by jurisdiction and for amounts exceeding 5% of their domestic tax rate. The rate reconciliation will also need to disclose both dollar amounts and percentages—currently it is either/or. Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid in the statement of cash flows, to evaluate income tax risks and opportunities. Companies have until May 30 to submit comments on the proposal.

 

IASB News

Members Sought for Implementation Group Focused on Small-to-Midsize Companies

The application period is now open for membership on the SME Implementation Group (SMEIG), the panel that addresses accounting rules for small-to-medium size entities (SME) that are not publicly accountable. Candidates that want to serve on the SMEIG should submit applications or nominations in English by April 6 to sme@ifrs.org., the IFRS Foundation announced. The SMEIG is a global panel established under the foundation to support adoption and monitor implementation of the IFRS for SMEs standard, a self-contained package of rules that was developed in 2009 for companies that do not have public accountability and publish general purpose financial statements for external users. More than 80 countries, including the United States, permit the use of IFRS for SMEs. The SMEIG can have at least 12 but not more than 30 members. It is chaired by IASB Member Jianqiao Lu and also includes appointed observers who participate in the SMEIG deliberations but cannot vote.

 

AICPA News

AICPA Publishes Revised Group Audits Standard

The AICPA’s Auditing Standards Board (ASB) has published Statement on Auditing Standards (SAS) 149, Special Considerations—Audits of Group Financial Statements. The publication of SAS 149 and SQMS 3 came at the end of January as the ASB voted to finalize its proposed standards on group audits, issued a year ago. SAS 149 supersedes SAS 122, Statements on Auditing Standards: Clarification and Recodification, as amended, section 600, Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors). “Group financial statements include the financial information of more than one entity or business unit through a consolidation process,” SAS 149 states. “The term consolidation process as used in this SAS refers not only to the preparation of consolidated financial statements in accordance with the applicable financial reporting framework but also to the presentation of combined financial statements and to the aggregation of the financial information of entities or business units, such as branches or divisions.” The AICPA said that these standards have not yet been codified within the professional standards in its Online Professional Library. The AICPA said that the contents will be included in its library on March 24.

Cpaj news brief new 730x330
Company The CPA Journal
Category FREE CONTENT;ARTICLE / WHITEPAPER
Intended Audience CPA - small firm
CPA - medium firm
CPA - large firm
Published Date 03/17/2023

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The CPA Journal is known as the “Voice of the Profession,” and is The New York State Society of CPA’s monthly flagship publication and top member resource. An award-winning magazine and finalist for excellence in journalism (2018, 2017 FOLIO magazine awards), The Journal has over 95% nationally focused content written by thought leaders in the accounting and finance industry.

For more than 85 years, The CPA Journal has been earning its reputation as an objective, critical source of information on issues of interest to CPAs. The Journal provides analysis, perspective, and debate on the issues that affect the CPA profession. Major topics include accounting and auditing, taxation, personal financial planning, finance, technology, and professional ethics. The CPA Journal is issued monthly in print, and offers daily insight and analysis digitally here on cpajournal.com. Published by the New York State Society of CPAs, The Journal’s active editorial and review process ensures thorough technical quality and material relevant to CPAs in public practice, industry, government and education.