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Bramwell's Lunch Beat: IFRS/US Update, Materiality Concerns, Tax Reform

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Nov 18th 2015
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Top SEC accountant urges supplemental use of global rules for US companies
US Securities and Exchange Commission (SEC) Chief Accountant James Schnurr said he has recommended US companies be allowed to use global accounting rules to supplement their main financial statements calculated under US regulations, wrote Michael Rapoport of the Wall Street Journal. Schnurr's recommendation to the commission could help resolve a long-standing debate over whether and how the United States should use International Financial Reporting Standards (IFRS). If Schnurr's recommendation is implemented, US companies could provide financial data calculated using IFRS, which differs in some respects from US GAAP, as an add-on to the main financial statements they provide. Those financial statements would continue to be calculated under US GAAP. “It's going through the rule-making process,” Schnurr said at an accounting conference in New York on Tuesday.

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Proposals would deter auditors from warning boards of deleted disclosures
Proposals to change the threshold for corporate disclosures will tie auditors' hands, limiting their ability to force disclosures that management, and its lawyers, delete, says an advisory committee to the US public company audit regulator, Francine McKenna wrote for MarketWatch. Members of the standing advisory group of the Public Company Accounting Oversight Board (PCAOB) voiced concerns on Nov. 12 about controversial proposals from the Financial Accounting Standards Board to change the threshold for corporate disclosure. These proposals redefine materiality as a legal concept to be interpreted by the courts, rather than an accounting concept. Martin Bauman, PCAOB chief auditor and director of professional standards, said the proposals would change the relationship between the auditor and the audit committee that's now mandated by law.

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Ryan says the House will work on tax reform
House Speaker Paul Ryan (R-WI) said on Tuesday evening that he plans for House lawmakers to pass tax reform in 2016, ahead of the presidential election, to advertise Republican ideas for voters, wrote Joseph Lawler of the Washington Examiner. While that effort likely would be stymied by the Senate and White House, Ryan acknowledged, he is open to working with Democrats on a smaller reform effort on international taxation meant to forestall the trend of corporations moving their headquarters out of the United States. “We believe we ought to show what we would do differently in specifics and lay that out to the country so we can have that kind of affirming election,” Ryan said during an event hosted by the Wall Street Journal. It is necessary for the House Republican majority to pass tax reform even if it won't become law to provide voters an alternative to Democrats' plans, he added.

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Lawmakers press Obama for meeting on Obamacare tax
Peter Sullivan of The Hill wrote that a bipartisan group of lawmakers is requesting a meeting with President Obama to discuss repealing Obamacare's “Cadillac tax.” The 40 percent excise tax on high-cost health insurance plans, set to take effect in 2018, was intended to help restrain healthcare costs, but it has drawn opposition from some lawmakers on both sides of the aisle worried that it will end up shifting healthcare costs onto workers. Sens. Dean Heller (R-NV), Sherrod Brown (D-OH), Martin Heinrich (D-NM), and Reps. Joe Courtney (D-CT) and Frank Guinta (R-NH) wrote to President Obama on Tuesday requesting a meeting “as soon as possible.” “Finding a path forward on the repeal of this provision is a bipartisan and bicameral end-of-year priority for each of us and a large number of our colleagues on both sides of the aisle,” the lawmakers wrote.

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