A BUSY SUMMER

While Congress and the Obama administration pushed the fight over the debt ceiling to the final minute - the issue had still not been resolved when we went to press - regulators and standard-setters continued the long, slow process of dealing with two accounting issues of longer standing.

The Financial Accounting Standards Board took the first step in developing a differential framework to offer a short-term solution for creating distinct standards for private companies, releasing a staff assessment that, in part, identified six significant factors that differentiate private company and public company reporting: types of users, access to management, investment strategies, ownership structures, accounting resources, and education. Intended as a stop-gap while FASB parent the Financial Accounting Foundation considered setting up a separate standard-setter for private companies, the differential framework would help FASB decide whether and when to adjust reporting requirements.

The Securities and Exchange Commission, meanwhile, was collecting public comments on a proposed workplan for adopting International Financial Reporting Standards in the U.S., and held a roundtable led by Chief Accountant Jim Kroeker that saw many of the participants favoring the "condorsement" approach, whereby FASB would endorse new IFRS rules one at a time as part of a convergence approach, rather than adopting them all at once. (For more, see our cover story, "Up in the air," and for a different view, see "The Spirit of Accounting," page 18.)

Also active was the Public Accounting Oversight Board, which issued for comment a set of proposed audit and attestation standards for audit engagements of broker-dealers.

Not to be outdone, the Governmental Accounting Standards Board released a raft of standards and proposals, including exposure drafts proposing improvements to reporting on pensions; new standards on deferred outflows and accounting for hedging (see page 55); and a preliminary views document on the recognition and measurement of elements of financial statements.

BAD COP, GOOD COP

While the tax preparer registration regime introduced this year was generally held to have run smoothly, the Internal Revenue Service did announce that it was sending out letters to the approximately 100,000 tax preparers who had failed one way or another to follow the new rules. Many of the 100,000 had used outdated Preparer Tax ID Numbers, or Social Security numbers instead of PTINs. It also issued Notice 2011-61, calling for comment on the process of choosing CPE providers for the registration regime.

Showing its kinder, gentler face, the IRS took pity on innocent spouses and eliminated the two-year limit on requests for relief. More changes are expected in the fall, but in the meantime those who've been denied relief can re-apply using Form 8857.

On the other hand, in Announcement 2011-42, it announced that it would stop authorizing the high-low per diem method for substantiating various travel expenses. It now plans to publish a revenue procedure this year outlining the general rules and procedures for substantiating expenses, while omitting the high-low substantiation method.

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