The American Institute of CPAs released its much-anticipated Financial Reporting Framework for Small- and Medium-Sized Entities, which is aimed at providing an alternative reporting option for small businesses that aren't required to use GAAP. The FRF for SMEs takes what the institute describes as a "common-sense" approach to financial reporting, based on traditional accounting methods, with the goal of making reporting simpler for small, private businesses.
Shortly after the framework's release, the National Association of State Boards of Accountancy advised private companies not to use it, saying that the new Private Company Council was making progress on making GAAP more suitable for private companies. The AICPA countered with a letter to state CPA societies explaining that FRF for SMEs was not meant to replace GAAP, but rather to serve as a "next-generation" Other Comprehensive Basis of Accounting.
The Internal Revenue Service continued under heavy fire for its targeting of conservative groups for extra scrutiny, as congressional committees generated more heat than light on the subject, Tea Party groups launched lawsuits, and some high-ranking staffers resigned, were fired or were placed on leave. A new acting commissioner, Danny Werfel, was appointed, and began naming new staff to help clean up the service. It didn't help that facts emerged simultaneously about questionable spending on conferences, travel and gifts at the IRS, or that, in addition to its earlier Star Trek and Gilligan's Island videos, it had also done a Mad Men parody.
The AICPA held the Spring Meeting of its Governing Council, which included a report on the institute's finances (sound), a vote in favor of a pilot program that would offer its credentials overseas to members of appropriate accounting organizations, and details of the future exam for the Chartered Global Management Accountant credential, which will be launched in January 2015. It will be three hours long, and cover everything in the body of knowledge of the Chartered Institute of Management Accountants, the AICPA's partner in the creation of the CGMA.
The Financial Accounting Standards Board endorsed three proposals issued by the Private Company Council in March that are aimed at simplifying accounting for privately held companies. The first proposal would not require private companies to separately recognize certain intangible assets acquired in a business combination; the second would allow for amortization of goodwill and a simplified goodwill impairment model; and the third would allow private companies the option to use two simpler approaches to account for certain types of interest rate swaps.
Separately, the board issued an accounting standards update providing a new approach for determining whether a public or private company is an investment company. It also voted to indefinitely defer certain disclosures about investments held by a non-public employee benefit plan in its plan sponsor's own non-public equity securities.
Finally, it responded to a post-implementation review of its accounting standard for business combinations by saying that it would consider the findings.
In a major breakthrough, the Public Company Accounting Oversight Board entered into a memorandum of understanding on enforcement cooperation with the China Securities Regulatory Commission and the Ministry of Finance.
The IRS closed for another furlough day, on June 14, and was scheduled to have two more this month, on July 5 and July 22. It also modified its "first-time abate" policy, which provides a one-time consideration of penalty relief, and finalized the regulations for the 10 percent excise tax on indoor tanning services.
IN OTHER NEWS
The AICPA and the NASBA have opened their Uniform CPA Examination testing in Brazil to all qualified citizens and permanent residents of South America.
A number of high-profile appointments were made: The Illinois CPA Society appointed Todd Shapiro as its president and CEO; Karen Abramson was named CEO of Wolters Kluwer's Tax & Accounting division, succeeding Kevin Robert, who will retire in September; and the Committee of Sponsoring Organizations of the Treadway Commission named Robert Hirth as its new chairman for a three-year term.
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