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 Many of the 100,000 had used outdated Preparer Tax ID Numbers, or Social Security numbers instead of PTINs.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.
DOG EAT DOG
In an interesting report, one IRS watchdog, the Treasury Inspector General for Tax Administration, said that another IRS watchdog, the Taxpayer Advocate Service, was pursuing relatively minor issues instead of truly systemic problems. TIGTA suggested that TAS's analysis of what was really a systemic problem could be improved. TAS, for its part, agreed with two of TIGTA's three recommendations, and said it had already implemented the third. However, National Taxpayer Advocate Nina Olson did note that, "Measuring the effectiveness of the Taxpayer Advocate Service is a significant challenge, not least because systemic problems do not lend themselves to 'unit' measurement." That is, of course, precisely the kind of measurement TIGTA likes to apply.
IN OTHER NEWS
Wells Fargo announced that it would sell H.D. Vest to Parthenon Capital Partners, a private equity firm. The broker-dealer, which includes a large number of accountants among its affiliates, had been on the block for a few months. Its existing management team, led by CEO Roger Ochs, will continue to operate the business. Financial terms of the transaction were not disclosed. Wells Fargo acquired the firm for $128 million in 2001.
Software and research giant CCH bought cloud-based sales tax automation service provider SpeedTax, expanding its reach in the corporate market - particularly to small and midsized businesses and the CPA firms that serve them.
New Sage CEO Pascal Houillon announced a major rebranding effort at the software vendor's user and partner conference. (See story, page 28.)
XBRL US launched the XBRL Challenge, offering a $20,000 grand prize to the company, team or individual developer who submits the most inventive and useful application leveraging XBRL-formatted data from the U.S. Securities and Exchange Commission's EDGAR database. Submissions will be accepted through Jan. 31, 2012; details can be found at http://xbrl.us/challenge.
The London-based International Valuation Standards Council has published a set of new International Valuation Standards covering a wide range of assets. The standards take effect in January 2012 and can be ordered from the IVSC's Web site, www.ivsc.org.
"Test drives for tax prep" (July 2011, page 1) gave the wrong phone number for CCH Small Firm Services' TaxWise product; the correct number is (888) 455-0182.
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