Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Archive for the ‘Accounting’ Category

Proposed delay in effective date for two accounting changes affecting charities.

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FASB officially issued an exposure draft on August 15, 2019 which proposes a one year delay for implementing three new accounting standards. Two of these proposed delays will affect many charities.

(Cross-posted from my other blog, Nonprofit Update.)

Effective date for SEC filers would not be changed.

I won’t discuss any changes for public business entities (PBE). Readers of my blog who fall into that category would be non-profits that are considered to be conduit bond obligors and EBPs that file their financials with the SEC.

You can find the exposure draft here.

The proposed delays for not-for-profit entities and private companies:

Leases

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Written by Jim Ulvog

August 17, 2019, 9:32 am at 9:32 am

Posted in Accounting

FASB plans to postpone changes in lease and credit loss standards for non-public companies.

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FASB decided on 7/17/19 to postpone four major accounting rule changes for non-public companies. Journal of Accountancy reported the news on 7/17/19:  FASB to propose delaying effective dates for 4 major standards.

(Cross-posted from my other blog, Nonprofit Update.)

Two of the rules are particularly significant to the non-profit community while two will affect few charities.

The article uses a new method of identifying effective dates. It mentions January 1 of the year the standard will first be effective instead of the ol’ “fiscal years beginning after December 15” phrasing usually used..

Changes include:

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Written by Jim Ulvog

July 19, 2019, 7:05 am at 7:05 am

Posted in Accounting

Comments from recent continuing education classes worth repeating: not-for-profit entities.

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Here are some fun or interesting or useful tidbits from the October 2018 A&A and the June 2019 Not-for-profit conferences presented by California Society of CPAs that apply to not-for-profit organizations.

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Non-attest services and Yellow Book independence. Everyone probably knows that charities with more than $2 million of revenue who are registered with the California Attorney General must have an audit. Excluded from the requirement would be religious organizations, who are exempt from registering with the AG.

That requirement was created by the Nonprofit Integrity Act of 2004, so it’s old news.

The best payoff from attending CPE conferences is to compare every piece of information you hear to what you think you know. So, here is one of the big rewards for me attending this class…

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Written by Jim Ulvog

July 5, 2019, 8:36 am at 8:36 am

Posted in Accounting, Audits

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Comments from recent continuing education classes worth repeating: accounting and auditing

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Image courtesy of Adobe Stock.

To get ready for a writing project this summer, I’ve been going over my notes from some CPE conferences and classes.

Thought I’d share some of the fun or interesting or useful tidbits from the October 2018 A&A and the June 2019 Not-for-profit conferences presented by California Society of CPAs.

Auditing

The auditor’s report will be completely reworked with implementation first required for 12/31/20 reports. The statement has been issued. Check out SAS-134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements if  you want to get a head start on the overhaul to audit rules.

By the way, an omnibus standard, SAS 135, makes lots of little changes you need to know about.

An exposure draft is out which addresses audit evidence. Final document expected in late 2019.

Accounting

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Written by Jim Ulvog

June 27, 2019, 6:58 am at 6:58 am

California bill AB 1181 would address valuation of GIK when donor restricts distribution to outside U.S.

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What is the fair value of donated medicine restricted for use outside the U.S.? Image courtesy of Adobe Stock.

The California Assembly has passed and sent to the Senate a bill which would require specific accounting for charities who receive gifts-in-kind which are restricted by the donor for distribution outside the U.S.

For that very specific type of GIK, the bill would require the donation to be recorded at the fair value in the country where the items will be used.

This will particularly affect donated pharmaceuticals, which often have a severely different value in the U.S. compared to values internationally.

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Written by Jim Ulvog

June 13, 2019, 8:41 am at 8:41 am

Posted in Accounting

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CPA sanctioned by California Attorney General over audit of charity

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The California AG negotiated a settlement with a charity for their alleged overvaluation of medical GIK. I say alleged because the charity, three present or former board members, the charity’s insurance company, and the external auditor all deny in the settlement they did anything wrong.

The alleged scheme, according to the AG, was the charity used two other charities, which it formed, to buy medicine in the Netherlands and then donate it back to the ‘parent’, which then recognized GIK at US prices.

The AG asserts that over the course of 25 or more transactions, the purchase of about $225,000 of medicine by the two controlled charities generated gift-in-kind revenue of about $34,900,000 in the sanctioned charity.

Of note for readers of this blog is that the CPA providing an external audit was sanctioned as part of the negotiated settlement. She audited the charity and signed its 990s. She also audited one of the controlled charities and signed their 990s.

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Written by Jim Ulvog

June 4, 2019, 10:23 am at 10:23 am

Been thinking the volume of accounting rules is growing a lot? It isn’t your imagination. Here’s a page count of GAAP.

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Is this how you’ve been feeling with all the changes in GAAP stacking up on your desk? Image courtesy of Adobe Stock.

Just in case you had been wondering in your idle time how many pages long the Accounting Standards Codification would be in print form, I have the answer.

10,068 pages.

How thick is that if you stacked the five volumes on top of one another?

12.75 inches.

I’m working on a writing project for which it will be convenient to have a hard copy of the ASC, so I ordered a copy. Yipee! It arrived yesterday!

In case it seems like the volume of rules is growing faster than you can keep track, here is a seven-year comparison, looking at the physical size and volume count of the 2017 and 2010 editions:

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Written by Jim Ulvog

September 13, 2018, 6:32 am at 6:32 am

Posted in Accounting