In 2002, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) agreed to work together to converge U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS). Revenue recognition is one of the most important projects on which these two bodies have worked together, and this work recently produced a new proposed standard. This new standard is expected to be released sometime in 2011 with an effective date still unknown. This new standard will replace most pre-existing general and industry-specific guidance and create a single revenue recognition standard for both U.S. GAAP and IFRS. The effects of this proposed standard on an entity will vary widely – some entities will not experience any change to some entities seeing a dramatic shift. The proposed standard will require greater judgment than is currently required under U.S. GAAP. The proposed standard will provide a core principle and chronological steps in determining revenue recognition.
Core principle:
Recognize revenue to depict the transfer of goods or services in an amount that reflects the consideration expected to be received in exchange for those goods or services. Read More…
As widely anticipated, President Obama signed into law on April 14th a bill to repeal expanded Form 1099 information reporting requirements for certain business payments and rental property expense payments.
The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 specifically repeals:
- the requirement for businesses, charities, and governmental entities to report payments to companies for merchandise purchased in the aggregate of $600 or more (originally effective for 2012),
- the requirement for rental property owners to report expense payments in the aggregate of $600 or more (originally effective for 2011), and
- the requirement for businesses, charities, governmental entities, and rental property owners to report payments for services and merchandise to corporations (other than attorneys and certain health care providers) in the aggregate of $600 or more (originally effective for 2012).
The repeals under the new law are retroactive, thus reinstating the status quo for Form 1099 reporting as established prior to enactment of the 2010 Patient Protection and Affordable Care Act and the 2010 Small Business Jobs Act. Read More…
In the current issue of Disclosures, the official magazine of the Virginia Society of CPAs, CB&H’s John Montoro discusses our current economic situation and why it is more critical now than ever to establish thorough reporting on intergovernmental financial dependency.
Prior to passage of the American Recovery and Reinvestment Act (ARRA), state and local governments were already receiving an average of 29% of their revenues from the federal government.
Today, due to the lingering affects of the 2008 recession, state and local governments are becoming increasingly more dependent on federal funds while the federal government continues in a direction of fiscal instability.
Our latest economic crisis has taught us that the sustainability of all three levels of government — local, state and federal, is no longer a given. We need to become more educated on the fiscal strengths and weaknesses that contribute to the economic sustainability of our governmental units. As financial professionals, it is incumbent upon us to see through the sound bites and political posturing and gain an understanding of the facts. And, as it turns out, there is plenty of reliable data out there.
The article examines the timeline leading up to the current financial state, where we’re heading, and the critical need for reporting on intergovernmental financial dependency.
Perhaps the biggest risk from intergovernmental financial dependency is ignoring that it exists. Ignoring the fiscal problems of the federal government has allowed the matter to get much worse, and to make the options for resolution all the more painful. From the perspective of the CPA, our challenge is that the clients we serve, most often, do not recognize the build-up of risks within their financial planning and reporting. Very few state and local governments either disclose within their annual reports the concentration of intergovernmental revenues or seek to alert their readers as to the risks of such dependency.
Click here to read “At the Tipping Point: How Intergovernmental Financial Dependency Affects Us All” (pdf)
Click here to learn more about CB&H’s Report on “Intergovernmental Financial Dependency and Related Risks” or here to download a pdf copy of the report (free registration required).
