In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 establishes comprehensive accounting guidance for revenue recognition and will replace substantially all existing U.S. GAAP on this topic. ASU 2014-09 is converged with IFRS 15, the comparable new standard issued by the IASB.
M&A transactions are among the most complex activities a business can undertake. So it should come as no surprise that so many of them fail every year. Any business leader who has been through a failed acquisition looks back to see what went wrong with the deal. If you want to uncover all risks, you’ll want to look at five primary types of due diligence that should be performed when contemplating an M&A transaction.
Until recently, software development and manufacturing have been very different industries. Under the recent Internal Revenue Code Section 199, Domestic Production Activity Deduction (DPAD), these industries may be meeting the same definition. This could mean a significant permanent tax deduction for software developers.
On June 8, 2015, the Financial Accounting Standards Board (FASB or Board) issued an Exposure Draft (ED) containing a proposed Accounting Standards Update (ASU) to amend ASC Topic 718, Compensation – Stock Compensation. The ED is the culmination of the FASB’s share-based payments accounting simplification project initiated in 2014.
On February 26, 2015, the District of Columbia (the District) enacted the Fiscal Year 2015 Budget Support Act of 2014 (the Budget Support Act) the result of which is, effective for taxable years beginning after 2014, the adoption of single sales factor apportionment, market-based sourcing, a throw-out rule for receipts from sales of other than tangible personal property, and a reduced 9.4% tax rate for corporations and unincorporated entities. The Budget Support Act also expands the scope of services subject to sales tax to include such services as car washing, bottled water delivery services, and health club services.
On May 18, 2015, the United States Supreme Court issued its decision in Comptroller of the Treasury of Maryland v. Wynne, No. 13-485, 575 U.S. ___ (2015). The Court held that Maryland’s limitation on the use of a resident credit for taxes paid to other states as an offset against the state portion of the personal income tax only, and not the county portion of the tax, violates the Commerce Clause of the United States Constitution. The Court’s decision opens the door to a tidal wave of refund claims for those taxpayers that were denied the credit or overlooked taking the credit against the county tax for taxes paid to other states on returns filed with the state, as well as for those taxpayers who have protective refund claims pending with the Comptroller.
In June 2015, the Audit Committee Collaboration, facilitated by the Center for Audit Quality (CAQ), released both the “External Auditor Assessment Tool: A Reference for Audit Committees Worldwide” and an updated version of the U.S. “External Auditor Assessment Tool." These tools are designed to assist audit committees in evaluating the external auditor to assess the quality of the audit, or to select or recommend the retention of the audit firm.
In February 2015, the Department of Labor (DOL) submitted an updated, proposed “conflict-of- interest” rule to the Office of Management and Budget for a 90-day interagency review process.
In the government contracting industry, contracts that must comply with the McNamara-O’Hara Service Contract Act (SCA) are becoming more prevalent than ever before. The SCA’s intent is to ensure that businesses with contracts whose principal purpose is to provide services in excess of $2,500 offer established wages and benefits to covered employees. If a contract is deemed to be subject to the SCA, all non-exempt employees working on that contract—in any capacity—must be compensated based on their respective Wage Determination (WD), which establishes the minimum wage and benefits for various positions.
The FASB issued an exposure draft proposing a one-year delay of the effective date for the new revenue recognition standard that it issued jointly with the IASB in 2014. Under the proposed amendments, the revenue recognition standard would take effect in 2018 for calendar year-end public entities.