We are pleased to release MaloneBailey's October 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
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What's the Crunch?
Featured Podcast
- How to Ace Your Virtual Interview
Recent Accounting & Regulatory Updates
Recent FASB & AICPA Updates
- 2021 FASB Investor Outreach Report
- Prospective Financial Information –2021 Edition of AICPA Audit and Accounting Guide Published
- COVID-19 –AICPA Issues TQA on Accounting for Certain Grants Received under COVID-19 Programs
- Equity Securities –FASB Proposes Improvements to Fair Value Guidance for Equity Securities
- Governmental Audit –GAQC 431 Published
Recent SEC Updates
- Release No. 34-92727: Freedom of Information Act Regulations
- SEC Staff Views: Statement Regarding Information Bundling and Corporate Penalties, Caroline Crenshaw, Commissioner- September, 2021
Tax Updates
- IRS Reminds Business Owners to Correctly Identify Workers as Employees or Independent Contractors
Extra Crunch
- NYSE SLICE: "Take a Step Back from the Daily Noise"
About MaloneBailey, LLP
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Tips and Tricks to Ace Your Virtual Interview
Summary - In this episode of Everybody Counts, Caroline Rosen, Marketing and Communications Manager, and Shelby Stevens, Human Resources Generalist, discuss what to do and what not to do for during virtual interviews.
For this podcast and many more, please visit the Resources section of the MaloneBailey website.
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.
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Recent FASB & AICPA Updates |
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2021 FASB Investor Outreach Report
Summary - The FASB has issued its 2021 Investor Outreach Report (Report), which highlights the investor outreach completed by the FASB staff over the last year.
The outreach included engagement in more than 430 investor interactions. Substantially all the interactions were the result of outreach aimed at soliciting investor perspectives, including buy-side portfolio managers and analysts, sell-side analysts, accounting analysts (both buy-side and sell-side), credit rating agency analysts and managers, individual investors, and private company lenders and other capital providers (e.g., venture capital/private equity).
According to FASB Chair Richard J. Jones, “[i]nvestor perspectives are critical to the Board’s ability to develop effective standards, so we undertake a number of initiatives to proactively engage this stakeholder group in our standard-setting process. The report explains our investor outreach program, activities over the last year, how we’ll continue to build on those initiatives to enhance our investor outreach efforts, and, perhaps most importantly, how investors can share their views with us.”
In addition to the issuance of the Report, the FASB launched an investor web portal to provides information on projects of interest to investors, investor-focused educational videos on specific standards, and how investors can share their views on all FASB activities.
For more information, click here.
© 2021 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
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Prospective Financial Information – 2021 Edition of AICPA Audit and Accounting Guide Published
Summary - The AICPA has published the 2021 edition of its Audit and Accounting Guide, Prospective Financial Information. This authoritative guide assists with interpreting and applying the guidance related to prospective financial information, including Statement on Standards for Attestation Engagements No. 19, Agreed-Upon Procedures Engagements, and Statement on Standards for Accounting and Review Services No. 25, Materiality in a Review of Financial Statements and Adverse Conclusions. This resource provides interpretive guidance and implementation strategies for all preparation, compilation examination and agreed upon procedures on prospective financial information.
Key benefits and updates include the following:
- Exposes potential pitfalls in the practice and helps with establishing proven best-practices.
- Provides practical tools and resources to assist with compliance with the latest regulations.
For more information, click here.
© 2021 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
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COVID-19 – AICPA Issues TQA on Accounting for Certain Grants Received under COVID-19 Programs
Summary - The AICPA has issued 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.
© 2021 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
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Equity Securities – FASB Proposes Improvements to Fair Value Guidance for Equity Securities
Summary - The FASB issued a proposed Accounting Standards Update (ASU) that would improve financial reporting for investors and other financial statement users by increasing comparability of financial information across reporting entities that have investments in equity securities measured at fair value that are subject to contractual restrictions preventing the sale of those securities. Stakeholders are encouraged to review and provide comment on the proposed ASU by November 14, 2021.
Topic 820, Fair Value Measurement, states that when measuring the fair value of an asset or a liability, a reporting entity should consider the characteristics of the asset or liability, including restrictions on the sale of the asset or liability, if a market participant also would take those characteristics into account. Key to that determination is the unit of account for the asset or liability being measured at fair value.
Some stakeholders noted that Topic 820 contains conflicting guidance on what the unit of account is when measuring the fair value of an equity security. This has resulted in diversity in practice on whether the effects of a contractual restriction that prohibits the sale of an equity security should be considered in measuring that equity security’s fair value.
To address this, the amendments in the proposed ASU would clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.
For more information, click here.
© 2021 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
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Governmental Audit – GAQC 431 Published
Summary - The AICPA’s Governmental Audit Quality Center (GAQC) has published Alert No. 431. This GAQC Alert discusses the following:
- The Office of Management and Budget (OMB) has issued a correction to the 2021 OMB Compliance Supplement;
- The 2021 Supplement is now posted to the GAQC Web site by individual section;
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The release of the 2021 AICPA Audit and Accounting Guides, State and Local Governments and Not-For-Profit Entities, and the status of the 2021 AICPA Audit Guide, Government Auditing Standards and Single Audits;
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Information about updated U.S. Department of Housing and Urban Development (HUD) agreed upon procedures reports and plans for updates to other illustrative reports included in the HUD Consolidated Audit Guide; and
- Department of Education (ED) guidance on how ED programs that use alpha characters to identify subprograms such as the Education Stabilization Fund are to be reported on the Data Collection Form.
For more information, click here.
© 2021 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
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Release No. 34-92727: Freedom of Information Act Regulations
Summary - The SEC has issued Final Rule, Freedom of Information Act Regulations. This final rule makes an amendment to the SEC’s Freedom of Information Act (FOIA) regulations to remove a provision stating that records that the FOIA requires to be made available for public inspection in an electronic format will be available to persons who do not have access to the internet in the SEC’s Public Reference Room. The SEC’s FOIA regulations will continue to provide that persons who do not have access to the internet can obtain the documents required to be made available for public inspection by telephone or email request to the Office of FOIA Services.
This final rule is effective upon publication in the Federal Register.
For more information, click here.
© 2021 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
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SEC Staff Views: Statement Regarding Information Bundling and Corporate Penalties, Caroline Crenshaw, Commissioner - September, 2021
Summary - SEC Commissioner Caroline A. Crenshaw recently discussed information bundling and SEC corporate penalties. In her remarks, Crenshaw discussed her concern that corporate benefits are “notoriously difficult to quantify. If we limit penalties to only those benefits that are easy to count, we will invariably undercount, leaving the corporation in a potentially better economic position for having committed the violation. That is precisely the wrong outcome to advance our goals of punishing misconduct and delivering effective specific and general deterrents. Paying a penalty cannot be just a cost of doing business.”
For more information, click here.
© 2021 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
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IRS Reminds Business Owners to Correctly Identify Workers as Employees or Independent Contractors
Written by Chuqiao Peng, Tax Senior, MaloneBailey, LLP
For small business owners, having a good understanding of the differences between workers identified as employees and independent contractors is critically important. The IRS recently featured tips on how to correctly determine whether the individuals providing services are employees or independent contractors and offered three categories to examine:
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Generally, an employer must withhold and pay income taxes, Social Security and Medicare taxes, as well as unemployment taxes for its workers identified as employees. If workers are misclassified as independent contractors, the employer’s share of payroll taxes will not be paid, and the employee’s share will not be withheld, resulting in employment taxes underpaid. If a business misclassified an employee without a reasonable basis, the business can be liable for the employment taxes for that individual.
IRS further points out that workers can use Form 8991, Uncollected Social Security and Medicare Tax on Wages, to figure and report their share of uncollected Social Security and Medicare taxes due on their compensation if they believe they are misclassified as independent contractors.
More information about the differences between workers identified as employees or independent contractors is available on IRS website.
If you would like additional information, please feel free to contact Nicole Zhao, Tax Partner.
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NYSE SLICE: "Take a Step Back from the Daily Noise"
A resource offered by the NYSE is Slice. According to the website, it's "branded Slice because of the collaboration between Cheddar and Intercontinental Exchange, which operates the NYSE.
These in-depth interviews help viewers “slice” through the noise to get to the truth of what CEOs, entrepreneurs and innovators are doing to change our future."
Conversations air on Cheddar from 8-10am ET every Wednesday and coincide with the NYSE Opening Bell. You can find Cheddar on DirecTV, Hulu, Twitter, Amazon and cheddar.com.
For more information about Slice and/or to watch the current episode, please click here .
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