September 2021: Latest SEC, FASB & Tax Updates & COVID-19 Related Updates from the SEC, IRS, Etc.

We are pleased to release MaloneBailey's September 2021 issue of The Crunch, our newsletter highlighting recent accounting, regulatory and tax updates. Please note that the updates provided in this newsletter are not a comprehensive list.

We encourage you to visit the SEC, FASB and IRS websites for more information as well as a complete list of updated rules, regulations and proposals. We invite you to contact us should you have any questions about the information provided in this issue. Please visit our website to review archived versions of this newsletter containing past accounting, regulatory and tax updates.

The MaloneBailey Team

www.malonebailey.com

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Featured Podcast

Reimagining the Workplace: A Discussion on the Hybrid Approach

Recent Accounting & Regulatory Updates

Recent FASB & AICPA Updates

FASB Accounting Standards Updates - Accounting Standards Update No. 2021-06 —Presentation of Financial Statements (Topic 205), Financial Services —Depository and Lending (Topic 942), and Financial Services — Investment Companies (Topic 946) —Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants
FASB Accounting Standards Updates - Accounting Standards Update No. 2021-05 —Leases (Topic 842): Lessors —Certain Leases with Variable Lease Payments
Financial Statements –GASB Issues Revised Proposed Concepts Statement for Notes to Financial Statements
GASB Practice Issues –GASB Releases Omnibus 20XX Proposal on Practice Issues
Subsidiary Disclosures –IASB Proposes Reduced Disclosure Requirements for Subsidiaries
Debt –FASB Discusses Agenda Item on Troubled Debt Restructurings
Cloud Computing –COSO Publishes Guidance on ERM for Cloud Computing
Revenue Recognition –FASB Discusses Revenue Recognition Standard Post-Implementation
Auditing Standards Board –Summary of July 20-22 Meeting Published
Depository and Lending Institutions –FASB Issues ASU No. 2021-06
Share-Based Awards –FASB Endorses PCC Consensus
COVID-19 –AICPA Issues New TQA on Accounting for Certain Grants Received under COVID-19 Programs

Recent SEC Updates

Release No. 34-87005C: Recordkeeping and Reporting Requirements for Security-Based Swap Dealers, Major Security-Based Swap Participants, and Broker-Dealers; Correction
SEC Staff Views: The FINRA Certified Regulatory and Compliance Professional Program Georgetown University, Hester M. Peirce, Commissioner - July, 2021
SEC Staff Views: Prepared Remarks Before the Principles for Responsible Investment “Climate and Global Financial Markets” Webinar, Gary Gensler, Chairman - July, 2021
SEC Staff Views: Statement on the IFRS Foundation’s Proposed Constitutional Amendments Relating to Sustainability Standards, Hester M. Peirce, Commissioner - July, 2021
SEC Staff Views: Prepared Remarks for National Whistleblower Day Celebration, Gary Gensler, Chairman - July, 2021
SEC Staff Views: Remarks Before the Aspen Security Forum, Gary Gensler, Chairman - August, 2021
Statement on the IFRS Foundation’s Proposed Constitutional Amendments Relating to Sustainability Standards, Hester M. Peirce, Commissioner - July, 2021
SEC Staff Views: Climate, ESG, and the Board of Directors: “You Cannot Direct the Wind, But You Can Adjust Your Sails”, Allison Herren Lee, Commissioner - June, 2021
Cryptocurrencies –SEC Chair Gensler Urges Stronger Investor Protections for Crypto
Security-Based Swap Dealers –SEC Publishes Correction to Final Rule on Recordkeeping and Reporting Requirements
Financial Markets –SEC Commissioner Peirce Discusses Financial Markets

Tax Updates

Information about Making 2021 Estimated Tax Payments

Extra Crunch

OTC Markets Whitepapers

About MaloneBailey, LLP

Featured Podcast

Reimagining the Workplace: A Discussion on the Hybrid Approach

Summary - Post pandemic life in the office is shaping up to look and feel different for many organizations worldwide. After having worked from home for more than a year, many organizations have announced their decision to implement a hybrid approach moving forward, that is combining workdays at the office and at home. Rethinking where and how we work is a hot topic today and one that many organizations are grappling with.

Shelby Stevens from the HR Department at MaloneBailey and Caroline Rosen from the Marketing Department at MaloneBailey discuss the blended approach, its benefits and challenges, considerations for putting a long term plan in place, how to address the 'culture' concern, employee burnout and mental wellness and the policies, tools, and training offerings to consider when weighing this approach.

Simply click on the image below to listen to the podcast. For this podcast and many more, please visit the Resources section of our website.

Recent FASB & AICPA Updates

FASB Accounting Standards Updates - Accounting Standards Update No. 2021-06 —Presentation of Financial Statements (Topic 205), Financial Services —Depository and Lending (Topic 942), and Financial Services — Investment Companies (Topic 946) —Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants

Summary - The FASB has issued Accounting Standards Update (ASU) No. 2021-06, Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. This ASU incorporates recent SEC rule changes into the FASB Codification, including SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants.

These incorporations do not change the accounting rules as issued by the FASB. The SEC guidance that is included in the Codification does not originate with the FASB—it is provided on a "pass through" basis merely as a convenience to Codification users. The SEC Sections do not contain the entire population of SEC rules, regulations, interpretive releases, and staff guidance. For example, the Codification does not include all content related to matters outside the basic financial statements, such as Management’s Discussion and Analysis (MD&A), or to auditing or independence matters.

For more information, click here.

FASB Accounting Standards Updates - Accounting Standards Update No. 2021-05 —Leases (Topic 842): Lessors —Certain Leases with Variable Lease Payments

Summary - The FASB has issued Accounting Standards Update (ASU) 2021-05, Leases (Topic 842), Lessors—Certain Leases with Variable Lease Payments. The guidance in ASU 2021-05 is intended to improve an area of the guidance under Topic 842, Leases, related to a lessor’s accounting for certain leases with variable lease payments.

Purpose of Amendments

The FASB adopted Topic 842 in February 2016, and the FASB is in the process of conducting a post-implementation review of the standard. In the course of this post-implementation review, the FASB received an agenda request highlighting an issue encountered by lessors. Under Topic 842, a lessor may be required to recognize a selling loss at lease commencement (day-one loss) for a sales-type lease with variable payments, even if the lessor expects the arrangement will be profitable overall. Stakeholders advised that this accounting outcome results in financial reporting that does not faithfully represent the underlying economics either at lease commencement or over the lease term. Therefore, users of financial statements are not being provided with information for those transactions that is decision-useful.

Amendments to Leases Standard by ASU 2021-05

To address this issue, the FASB is amending the lessor lease classification requirements. These amendments require a lessor to classify and account for a lease with variable payments as an operating lease if:

The lease would have been classified as a sales-type lease or a direct financing lease in accordance with the classification criteria in paragraphs 842-10-25-2 through 25-3; and
The lessor otherwise would have recognized a day-one loss.

A day-one loss or profit is not recognized under operating lease accounting. The resulting financial reporting is expected to more faithfully represent the economics underlying the lease and improve the decision usefulness of information provided to the users of financial statements.

Effective Dates

Subject to certain transition requirements, the ASU 2021-05 amendments are effective for fiscal years beginning after December 15, 2021, for all entities, and for interim periods within those fiscal years for public business entities and interim periods within fiscal years beginning after December 15, 2022, for all other entities.

For more information, click here.

Financial Statements –GASB Issues Revised Proposed Concepts Statement for Notes to Financial Statements

Summary - The GASB has issued a proposed Concepts Statement and Revised Exposure Draft, Communication Methods in General Purpose External Financial Reports That Contain Basic Financial Statements: Notes to Financial Statements. The comment deadline is October 15, 2021.

The GASB issued an Exposure Draft on this topic in early 2020. The GASB revised the Exposure Draft and issued the revision to incorporate feedback received from stakeholders on the previous proposal and to seek feedback on the resulting proposed revisions. The GASB believes the proposed revisions will improve the final concepts.

The purpose of the proposed Concepts Statement is to guide the GASB when establishing note disclosure requirements for state and local governments. The document is part of the GASB’s response to the results of its research reexamining existing note disclosure requirements.

The proposed concepts primarily are intended to provide the GASB with criteria to consistently evaluate notes to financial statements in the standards-setting process. They also may help stakeholders to understand the fundamental concepts underlying future GASB pronouncements. The proposed concepts include, for example the:

Purpose of notes to financial statements;
Intended users of note disclosures;
Types of information that should be disclosed in notes; and
Types of information that are not appropriate for note disclosures.

A key element of the proposed Concepts Statement is the concept of essentiality. The Revised Exposure Draft would establish that notes to financial statements are essential to making economic, social, or political decisions or assessing accountability. The revised proposal also identifies the characteristics that indicate information is essential to users:

Users utilize the information in their analyses for making decisions or assessing accountability or would modify those analyses to incorporate the information if it were made available.
The information has or would have a meaningful effect on users’ analyses for making decisions or assessing accountability.
A breadth or depth of users utilize or would utilize the information in their analyses for making decisions or assessing accountability.

For more information, click here.

GASB Practice Issues –GASB Releases Omnibus 20XX Proposal on Practice Issues

Summary - The GASB has issued the Exposure Draft, Omnibus 20XX, which includes proposed guidance addressing various accounting and financial reporting issues identified during the implementation and application of certain GASB pronouncements or during the due process on other pronouncements. The comment deadline is September 17, 2021.

The issues covered by the Exposure Draft, Omnibus 20xx, include:

Accounting and financial reporting for exchange or exchange-like financial guarantees;
Classification and reporting of certain derivative instruments that are neither hedging derivative instruments nor investment derivative instruments;
Clarification of certain provisions of: (a) Statement No. 87, Leases, (b) Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, and (c) Statement No. 96, Subscription-Based Information Technology Arrangements;
Extending the period during which the London Interbank Offered Rate (LIBOR) is considered an appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of certain interest rate swaps;
Accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance Program (SNAP);
Disclosures related to nonmonetary transactions;
Pledges of future revenues when resources are not received by the pledging government; and
Updating certain terminology for consistency with existing authoritative standards.

For more information, click here.

Subsidiary Disclosures – IASB Proposes Reduced Disclosure Requirements for Subsidiaries

Summary - The IASB has proposed a new International Financial Reporting Standard (IFRS) that would permit eligible subsidiaries to apply IFRSs with a reduced set of disclosure requirements. Comments are due by January 31, 2022.

The Exposure Draft, Subsidiaries without Public Accountability: Disclosures, responds to feedback from stakeholders and is designed to ease financial reporting for eligible subsidiaries while meeting the needs of the users of their financial statements.

The proposed IFRS would be available to subsidiaries without public accountability, that is, companies that are not financial institutions or listed on a stock exchange, and whose parent companies prepare consolidated financial statements applying IFRS.

These subsidiaries report to their parent company for consolidation purposes applying IFRS. Electing to apply the proposed IFRS would enable them to also use IFRS when preparing their own financial statements but with reduced disclosures.

The proposals would save subsidiaries time and money by:

Eliminating the need to maintain an additional set of accounting records for reporting purposes—if the subsidiary currently does not apply IFRS in its own financial statements; and
Reducing the disclosures required to comply with IFRS.

The IASB has tailored the disclosure requirements in the proposal to meet the needs of financial statement users of subsidiaries without public accountability.

According to Sue Lloyd, Vice-Chair of the IASB, said about the proposal: ”Our proposed Standard aims to provide a solution that will simplify reporting and be cost-effective for subsidiaries while meeting the information needs of the users of their financial statements.”

The IASB has also published a companion “Snapshot” to the Exposure Draft that provides an overview of the proposal, including a discussion of the IASB objective, the proposals, and next steps in development and release of the final IFRS.

For more information, click here.

Debt –FASB Discusses Agenda Item on Troubled Debt Restructurings

Summary - As reported in its “Summary of Board Decisions” publication, the FASB met on July 14, 2021 and discussed whether to add a project to its technical agenda to address the accounting for Troubled-Debt Restructurings (TDR) by creditors for entities that have adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.

The FASB added a project to its technical agenda to consider removing TDR recognition and measurement guidance for creditors from GAAP for entities that have adopted Update 2016-13 and to consider enhancing certain loan modification disclosures.

The FASB also discussed whether to add a project to its technical agenda to address the accounting for acquired financial assets in accordance with ASU 2016-13. The FASB added a project to its technical agenda to consider: (1) expanding the scope of the purchased credit deteriorated (PCD) accounting model to all loans acquired in a business combination; and (2) modifying the presentation of expected credit losses for acquired financial assets that meet the definition of PCD.

For more information, click here.

Cloud Computing –COSO Publishes Guidance on ERM for Cloud Computing

Summary - The Committee of Sponsoring Organizations of the Treadway Commission (COSO) has published new guidance, Enterprise Risk Management for Cloud Computing.

COSO developed this guidance in view of the increased need for more remote and flexible work environments as a result of the pandemic as businesses are utilizing cloud computing more. COSO notes that use of cloud computing has become an essential element to compete in the marketplace.

“The speed at which cloud computing can be procured and implemented is one of its many valuable traits,” said Paul Sobel, COSO Chairman. “However, some organizations may not have had the capability to implement appropriate controls designed to mitigate the risks in their cloud environments. A structured adoption of cloud computing, including a holistic cloud computing governance program that addresses the associated risks and is incorporated into the ERM program, will enable an organization to derive the most value and enable the organization to achieve its strategic objectives.”

The project, commissioned by COSO and co-authored by Mike Grob, Principal, and Victoria Cheng, Managing Director, in Crowe LLP’s Consulting services, provides a concise roadmap to implement cloud computing and describe appropriate roles and responsibilities. The guide provides a structure to utilize the COSO ERM framework in thinking through evolving cloud computing risks.

The use of the COSO ERM framework enables cloud computing to be integrated with the organization’s ERM function. The guidance explains how to apply the COSO ERM framework by evaluating each component as well as the 20 principles to cloud computing governance. As noted in the guidance, those organizations that have not yet created a cloud governance program can do so at any time and continue to refresh as changes occur. By incorporating cloud governance into the organization’s cloud computing processes, the organization is better positioned to manage risks that threaten the strategy and objectives of the organization.

For more information, click here.

Revenue Recognition – FASB Discusses Revenue Recognition Standard Post-Implementation

Summary - As reported in its “Summary of Board Decisions” publication, the FASB met on July 28, 2021, and discussed feedback received to date during the post-implementation review (PIR) of Topic 606, Revenue from Contracts with Customers. The FASB staff presented a report of its activities as part of the PIR process and summarized feedback received to date based on its direct outreach with stakeholders and monitoring of publicly available information. While the FASB made no decisions, it provided the FASB staff with direction about additional research, outreach, and education.

The FASB staff also will continue to perform research as part of the PIR process and will provide future updates to the FASB.

For more information, click here.

Auditing Standards Board –Summary of July 20-22 Meeting Published

Summary - The AICPA has published a summary of the Auditing Standards Board meeting held on July 20-22, 2021. The ASB continued its discussion from the January, March and May 2021 ASB meetings of issues arising from the comment letters received in connection with the Exposure Draft of proposed SAS Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and its Environment. The ASB plans on voting about issuing the proposed standard as final at its meeting on August 18, 2021.

For more information, click here.

COVID-19 –AICPA Issues New TQA on Accounting for Certain Grants Received under COVID-19 Programs

Summary - The AICPA has issued new Technical Question and Answer (TQA) 5270: Other Income, under Section 5270.01, Recipient Accounting for Shuttered Venue Operators Grants and Restaurant Revitalization Fund Grants Received Under the Small Business Administration COVID-19 Relief Programs.

The TQA includes guidance on how a recipient should account for a Shuttered Venue Operators Grant (SVOG) or a Restaurant Revitalization Fund (RRF) Grant issued under the Small Business Administration COVID-19 Relief Programs. The guidance indicates that “[U]nder the terms of both the SVOG and RRF grants, recipients are not required to repay the funding as long as funds are used for eligible uses by the dates specified by each respective program.”

The TQA provides guidance on accounting for these grants for private business (for-profit) entities and not-for-profit entities. SVOG and RRF grants are not available to publicly traded entities. SVOG and RRF grants are available for private business entities, although not-for-profits are eligible only for SVOG grants. TQA 5270.01 discusses in detail the differing accounting models that apply, depending on whether the entity is not-for-profit or for-profit.

For more information, click here.

Share-Based Awards – FASB Endorses PCC Consensus

Summary - As reported in its “Summary of Board Decisions” publication, the FASB met on August 4, 2021 and endorsed the PCC’s consensus reached at its June 22, 2021 meeting on Issue No. 2018-01, “Practical Expedient to Measure Grant-Date Fair Value of Equity-Classified Share-Based Awards.” The FASB decided to issue a final ASU.

The FASB endorsed the PCC’s consensus to issue a final Update for a practical expedient for a private company to determine the current price input of equity-classified share-based awards issued to both employees and nonemployees. That consensus describes the characteristics of a reasonable application of a reasonable valuation method using the same description provided within the Treasury Regulations related to Section 409A of the U.S. Internal Revenue Code as of the issuance date of a final ASU.

For more information, click here.

Recent SEC Updates

SEC Staff Views: The FINRA Certified Regulatory and Compliance Professional Program Georgetown University, Hester M. Peirce, Commissioner - July, 2021

Summary - SEC Commissioner Hester M. Peirce recently discussed the U.S. financial markets and opportunities to engage more investors. Peirce indicates that regulation of the securities markets plays an important part in engaging investors and should be carefully considered. Peirce indicates that our financial markets “are among the greatest wealth-generating machines ever developed by any society. Countless Americans have invested in these markets to generate the returns that empower them to buy homes, to pay for their children’s educations, to start businesses, and to prepare for retirement. Over the long term, our public markets have generated consistently strong returns that make it possible for our fellow citizens to pursue these and other dreams.”

For more information, click here.

SEC Staff Views: Prepared Remarks Before the Principles for Responsible Investment “Climate and Global Financial Markets” Webinar, Gary Gensler, Chairman - July, 2021

Summary - SEC Chair Gary Gensler recently discussed climate risk disclosures and the SEC. Gensler indicates that when it comes to climate risk disclosures, “investors are raising their hands and asking regulators for more.” As a result, Gensler has asked the SEC staff to develop a mandatory climate risk disclosure rule proposal for the SEC’s consideration by the end of 2021. Gensler indicates that he believes the SEC can bring greater clarity to climate risk disclosures. Points of emphasis on climate risk disclosures indicated by Gensler in his remarks included:

Climate risk disclosures should be consistent and comparable.The consistency with which issuers report information leads to comparability between companies, today and over time. In the proposing draft likely later this year, Gensler has asked staff to consider whether these disclosures should be filed in the Form 10-K, living alongside other information that investors use to make their investment decisions.
Climate risk disclosures should be “decision-useful.”A decision-useful disclosure has sufficient detail so investors can gain helpful information and is not simply generic text. In appropriate circumstances, Gensler believes such prescribed disclosure strengthens comparability. Gensler has asked the SEC staff to consider a variety of qualitative and quantitative information about climate risk that investors either currently rely on, or believe would help them make investment decisions going forward.

Gensler indicates that he has asked the SEC staff to learn from and be inspired by external standard-setters. However, Gensler believes that the SEC should move forward to write rules and establish the appropriate climate risk disclosure regime for our markets, as it has in prior generations for other disclosure regimes.

For more information, click here.

SEC Staff Views: Statement on the IFRS Foundation’s Proposed Constitutional Amendments Relating to Sustainability Standards, Hester M. Peirce, Commissioner - July, 2021

Summary - SEC Commissioner Hester M. Peirce recently announced that she has provided comments to the IFRS in response to its request for comment addressing the IFRS Foundation’s proposed constitutional amendments relating to sustainability standards. Specifically, the IFRS Foundation is formally exploring the creation of an International Sustainability Standards Board under the Foundation’s governance structure. Peirce urges the IFRS Foundation “not to wade into sustainability standard-setting because doing so would (i) improperly equate sustainability standards with financial reporting standards, (ii) undermine the Foundation’s current important, investor-centered work, and (iii) raise serious governance concerns.”

For more information, click here.

SEC Staff Views: Prepared Remarks for National Whistleblower Day Celebration, Gary Gensler, Chairman - July, 2021

Summary - SEC Char Gary Gensler recently marked the National Whistleblower Day celebration. Gensler indicates that he believes “deeply in whistleblower programs and look forward to building on the work of past Chairs to ensure the continued strength of the SEC’s program.” Gensler has asked the SEC staff to examine whether and how the program could be further strengthened to ensure that misconduct within the power of the SEC is identified, addressed, and stopped. Gensler also believes that the SEC should look for opportunities to continue to reduce processing times in SEC whistleblower award determinations. Gensler has directed the SEC staff to prepare for the SEC’s consideration later this year potential revisions to these two rules that would address the concerns that these recent amendments would discourage whistleblowers from coming forward. In particular, the SEC staff is considering whether the rules should be revised to permit the SEC to make awards for related actions that might otherwise be covered by an alternative whistleblower program that is not comparable to the SEC’s own program, and to clarify that the SEC will not lower an award based on its dollar amount

For more information, click here.

SEC Staff Views: Prepared Remarks for National Whistleblower Day Celebration, Gary Gensler, Chairman - July, 2021

For more information, click here.

SEC Staff Views: Remarks Before the Aspen Security Forum, Gary Gensler, Chairman - August, 2021

Summary - SEC Chair Gary Gensler called the current state of crypto investing something akin to the Wild West and called for greater investor protections. Gensler cautions that the crypto asset class is “is rife with fraud, scams, and abuse in certain applications. There’s a great deal of hype and spin about how crypto assets work. In many cases, investors aren’t able to get rigorous, balanced, and complete information. If we don’t address these issues, I worry a lot of people will be hurt.”

Gensler believes that the current crypto market has many tokens that may be unregistered securities, without required disclosures or market oversight. Gensler indicates that the world of crypto finance now has platforms where people can trade tokens and other venues where people can lend tokens. He believes these platforms not only can implicate the securities laws and some platforms also can implicate the commodities laws and the banking laws. To the extent that there are securities on these trading platforms, under our laws they have to register with the SEC unless they meet an exemption.

Gensler called on Congress to act on crypto legislation. Gensler indicates that additional Congressional authorities are needed “to prevent transactions, products, and platforms from falling between regulatory cracks. We also need more resources to protect investors in this growing and volatile sector. We stand ready to work closely with Congress, the Administration, our fellow regulators, and our partners around the world to close some of these gaps. In my view, the legislative priority should center on crypto trading, lending, and DeFi platforms. Regulators would benefit from additional plenary authority to write rules for and attach guardrails to crypto trading and lending.”

For more information, click here.

Statement on the IFRS Foundation’s Proposed Constitutional Amendments Relating to Sustainability Standards, Hester M. Peirce, Commissioner - July, 2021

For more information, click here.

SEC Staff Views: Climate, ESG, and the Board of Directors: “You Cannot Direct the Wind, But You Can Adjust Your Sails”, Allison Herren Lee, Commissioner - June, 2021

Summary - SEC Commissioner Allison Herren Lee recently discussed the role corporate boards of directors play in navigating the challenges presented by climate change, racial injustice, economic inequality, and numerous other issues that are fundamental to the success and sustainability of companies, financial markets, and our economy. Lee discussed ESG in the context of the most recent proxy season which saw growing shareholder proposal support related to ESG initiatives and unprecedented access to corporate boards of directors from climate activists. In addition, Lee discusses understanding ESG and corporate board responsibilities and mitigating ESG risks and maximizing ESG opportunities.

For more information, click here.

SEC Staff Views: Climate, ESG, and the Board of Directors: “You Cannot Direct the Wind, But You Can Adjust Your Sails”, Allison Herren Lee, Commissioner - June, 2021

For more information, click here.

Cryptocurrencies –SEC Chair Gensler Urges Stronger Investor Protections for Crypto

For more information, click here.

Security-Based Swap Dealers –SEC Publishes Correction to Final Rule on Recordkeeping and Reporting Requirements

Summary - The SEC has published a correction to its previously adopted recordkeeping, reporting, and notification requirements applicable to security-based swap dealers and major security-based swap participants, securities count requirements applicable to certain security-based swap dealers, and additional recordkeeping requirements applicable to broker-dealers to account for their security-based swap and swap activities. This document corrects a technical inaccuracy in that release.

This correction is effective upon publication in the Federal Register.

For more information, click here.

Financial Markets –SEC Commissioner Peirce Discusses Financial Markets

For more information, click here.

Tax Updates

Information About Making 2021 Estimated Tax Payments

Written by Chuqiao Peng, Tax Senior, MaloneBailey, LLP

As we approach the final two deadlines for paying 2021 estimated tax payments on September 15, 2021 and January 15, 2022, it’s a good time to learn more about estimated tax. Generally, individual taxpayers generally need to make estimated tax payments if they expect to owe $1,000 or more when the file their 2021 tax return after adjusting for any withholding tax while as corporations generally must make estimated payments if they expect to owe $500 or more on their 2021 tax return.

For individual taxpayers, there is some additional information to consider to determine your 2021 estimated tax:

Tuition and fees deduction is not available in 2021; Instead, the income limitation on the lifetime learning credit has been increased.
Standard deduction amount has increased as listed below for each filing status:
Married filing jointly or qualifying widow: $25,100
Head of household: $18,800
Single or married filing separately: $12,550
The maximum amount of earned income (wages and net earnings from self-employment) subject to the social security tax is $142,800
The maximum adoption credit or exclusion for employer-provided adoption benefits has increased to $14,440. Taxpayers with less than $256,660 adjusted gross income will be eligible to claim.

To avoid underpayment penalty for 2021, the safe harbor for individuals is to pay 100% of the tax shown on 2020 tax return. For higher income individuals with more than $150k adjusted gross income in 2020 (or more than $75k, if you were married and filing a separate return), the required payment is 110% of the tax shown on 2020. Noted if your total tax was $0 in 2020, you cannot use $0 as your safe harbor for 2021 estimated payment.

For corporate taxpayers, IRS has provided Form 1120-W, estimated tax worksheet, at https://www.irs.gov/pub/irs-pdf/f1120w.pdf to help corporations figure out their tax liabilities. The corporation must make installment payments of estimated tax if it expects its total tax for the year (less applicable credits) to be $500 or more. The installments are due by the 15^th days of the 4^th, 6^th, 9^th, and 12^th month of the year.

Generally, a corporation is subject to underpayment penalty if its tax liabilities is $500 or more, and it did not timely pay at least the smaller of:

Its tax liability for the current year, or
Its prior year’s tax (may not apply if the corporation has $0 tax in prior year)

If you would like additional information, please click here or contact our, Nicole Zhao, Tax Partner.

Extra Crunch

OTC Markets Whitepapers & Blog

Summary - OTC Markets provides research and analysis by industry experts on a variety of topics. From The JOBS Act to IR strategy, regulatory updates and much more, OTC Markets's whitepapers, topics vary and offer valuable information.

For all whitepapers and the OTC blog, click here.

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