New Q&A Addresses Auditing and Accounting Issues

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The American Institute of CPAs (AICPA) recently released 27 technical questions and answers regarding auditing and accounting issues posted since July under the new IRS partnership audit regime.

According to the AICPA, the Q&A was developed after questions were raised on how the rules apply and how a partnership should account for payments to the IRS for prior underpayments of tax, interest and penalties. The rules apply to all partnerships, except for qualifying partnerships that may elect out for a tax year, the AICPA states.

If income taxes paid by the entity are attributable to the entity, they should be accounted for under the ASC Topic 740 accounting model. If, however, the income taxes paid by the entity are attributable to the owners, they should be accounted for as a transaction with owners. 

The AICPA cautions that the Q&A is not a source of “established authoritative principles.” The topics were selected by staffers of the organization’s technical hotline and other groups within the AICPA, and have not been acted upon by any senior committee.

Here’s a list of question topics. Full questions and answers are available in the above link.

1. Auditing

  • Section 6935.03, Multiemployer Plan Payroll Compliance Services—Engagement Letter (Issue Date: March 2018)
  • Section 6935.04, Multiemployer Plan Payroll Compliance Services—Representation Letters From Engaging Party (Issue Date: March 2018)
  • Section 6935.05, Multiemployer Plan Payroll Compliance Services—Representations Not Obtained From Responsible Parties (Issue Date: March 2018)
  • Section 6935.06, Multiemployer Plan Payroll Compliance Services—Use of AUP or Other Reports as Audit Evidence (Issue Date: March 2018)
  • Section 9160.31, Following Accounting Standards as Promulgated by FASB by a State or Local Governmental Entity (Issue Date: July 2017)
  • Section 9160.32, Reporting on Accounting Standards as Promulgated by FASB by a State or Local Government (Issue Date: July 2017)
  • Section 9160.33, Engagement Acceptance When a State or Local Government Elects to Follow a Special Purpose Framework (Issue Date: July 2017)
  • Section 9160.34, Accounting Standards as Promulgated by FASB as a Special Purpose Framework (Issue Date: July 2017)
  • Section 9160.35, Reporting on Indian Tribe Financial Statements Prepared in Accordance With Accounting Standards as Promulgated by FASB (Issue Date: July 2017)

2. Accounting

  • Section 2220.28, Definition of Readily Determinable Fair Value and Its Interaction With the NAV Practical Expedient (Issue Date: November 2017)
  • Section 7100.01, Use of the Term “Security” in the Definition of a Public Business Entity (Issue Date: October 2017)
  • Section 7100.02, Types of Securities Included in the Definition of a Public Business Entity (Issue Date: October 2017)
  • Section 7100.03 Use of the Term “Over-the-Counter Market” in the Definition of a Public Business Entity (Issue Date: October 2017)
  • Section 7100.04, Use of the Term “Conduit Bond Obligor” in the Definition of a Public Business Entity (Issue Date: October 2017)
  • Section 7100.05, FINRA TRACE and MSRB EMMA Data and a Public Business Entity (Issue Date: October 2017)
  • Section 7100.06, Use of the Phrase “Contractual Restriction on Transfer” and a Public Business Entity (Issue Date: October 2017)
  • Section 7100.07, Use of the Terms “Prepare,” “Publicly Available,” “Financial Statements,” and “Periodic Basis” in the Definition of a Public Business Entity (Issue Date: October 2017)
  • Section 7100.08, Application of the Definition of a Public Business Entity When Entities are Organized in Tiered Organizational Structures (Parent, Consolidated Subsidiaries, Nonconsolidated Entities, Guarantors, Equity Method Investees) (Issue Date: October 2017)
  • Section 7100.09, Financial Statements or Financial Information Filed With the SEC and Considerations for Effective Dates and the Definition of a Public Business Entity (Issue Date: October 2017)
  • Section 7100.10, Accounting Standard Update Effective Dates and the Definition of a Public Business Entity (Issue Date: October 2017)
  • Section 7100.11, Evaluating the Definition of Public Business Entity for Financial Institutions Subject to Section 36 of the Federal Deposit Insurance Act and Part 363 of the FDIC Rules and Regulations  (Issue Date: October 2017)
  • Section 7100.12, Mutual Depository Institutions and the Definition of a Public Business Entity (Issue Date: October 2017)
  • Section 7100.13, Brokered Certificates of Deposit and the Definition of a Public Business Entity (Issue Date: October 2017)
  • Section 7100.14, Private Resales (Rule 144 and Rule 144A) and the Definition of a Public Business Entity (Issue Date: October 2017)
  • Section 7100.15, Insurance Companies and the Definition of Public Business Entity (Issue Date: October 2017)
  • Section 7100.16, Brokers, Dealers, and Futures Commission Merchants and the Definition of a Public Business Entity (Issue Date: October 2017)
  • Section 7200.09, Tax Accounting Considerations Under Partnership Audit Regime (Issue Date: March 2018)

About Terry Sheridan

Terry Sheridan

Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.

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