The new tax reform law, commonly called the “Tax Cuts and Jobs Act” (TCJA), is the biggest federal tax law overhaul in 31 years, and it has both good and bad news for taxpayers.
Below are highlights of some of the most significant changes affecting individual and business taxpayers. Except where noted, these changes are effective for tax years beginning after December 31, 2017. (more…)
If you have been following Steps 1 (Identify the Contract with the Customer) through 3 (Determining a Transaction Price), of the revenue recognition update as eagerly as I have, then I am sure that you keenly await the discussion on Step 4 about the allocation of the transaction price to the performance obligations in a contract. The wait is over as we explore Step 4 in this blog post. A couple key concepts that we need to understand in this process: the allocation objective and standalone selling price. (more…)
By Jeff Faust, CVA, Director of Valuation Services
ASL Business Valuation Services
Earlier this year we wrote about the looming regulations affecting valuation discounts under the IRS Proposed Section 2704 Regulations. The proposed regulations would have curbed valuation discounts, resulting in increased estate taxes on the deaths of owners of family businesses.
The Treasury, after extensive deliberation in furtherance of the policies stated in Executive Order 13789, decided to withdraw these regulations entirely for the following reasons: (more…)
By Josh Cross, Senior Audit Manager
Now that all of the performance obligations (Step 2) of the contract have been separately identified, it’s time to determine a transaction price. Seems easy, right?
ASC 606 defines the transaction price as “the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes).” On the surface this sounds like an easy step for your entity to identify the price you are selling a product for, but in practice we know that not all transaction prices are fixed at the onset of the contract. When calculating the transaction price, an entity needs to consider all of the following: (more…)
Stories of cyber-attacks, malware, ransomware and all possible variations of data breaches have been grabbing headlines in recent months. Personally, I’ve been on the receiving end of phishing emails from several of my business contacts, unbeknownst to them, asking me to click on spurious links “recommended” by them. My colleagues Kay Filler and Nick Sabbatini wrote on the topics of ID theft and data breach risks not too long ago and offered some handy tips on the subject: ID Theft – Insider View & Technology and Connectivity: Understand and Mitigate Data Breach Risks. (more…)
To continue the discussion of the ASC 606, Step 2 of the revenue recognition process requires examining what the seller has promised to do for the customer, and if there are multiple promises, whether these promises should be accounted for separately or combined. This examination determines the performance obligations which are the basis for the revenue recognition. (more…)
The Republican promise of tax reform in 2017 took a huge step forward yesterday when Republican lawmakers released a framework for tax reform, announcing that their goals are to cut tax rates, simplify the Internal Revenue Code, and provide a more competitive environment for business. The framework generally reiterates proposals made by President Donald Trump in April. (more…)
Revenue recognition is getting a lot of attention since ASC Topic 606 “Revenue from Contracts with Customers” was first issued in 2014. Since that date, we have had several posts on our blog that focus on some of the details and changes related to the new standard. As we get closer to implementation, it is time to take a closer look. (more…)
“Debt issuance costs” are costs incurred that would not have been incurred had not an entity procured a new debt instrument – in other words, incremental costs directly related to the new financing. The FASB Accounting Standards Codification (ASC), interestingly, does not define “debt issuance costs”, although the FASB issued two Accounting Standards Updates (ASUs) in 2015 related to presentation of debt issuance costs, with effective dates for nonpublic companies for financial statements covering fiscal years ended in December 2016 or later. (more…)