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Digital Assets and Noncash Considerations

By Audit, Financial Statement Audit, Financial Statement Review, Insights

On March 21, 2022, the US District Court for the Eastern District of Tennessee ruled in favor of CIC Services, LLC (“CIC”) in their case against the IRS regarding Notice 2016-66 (the “Notice”). In CIC Services, LLC v. IRS (“CIC Services”), the ruling stated that IRS did not comply with the mandatory notice-and-comment requirements under the Administrative Procedures Act (“APA”) and the IRS’ issuance of the Notice was arbitrary and capricious as set forth under the APA.

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Private Companies Officially on the Clock to Implement New Lease Standards

By Audit, Financial Statement Audit, Financial Statement Review, Insights

The new lease accounting standard is here for private companies. The revised lease guidance was introduced by the Financial Accounting Standards Board (FASB) in 2016 as Accounting Standards Update (ASU) 2016-02 creating Topic 842, Leases, of the Accounting Standards Codification (Topic 842 or the Lease Standard). Topic 842 is intended to “increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.”

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Accounting for Deferred Revenue under ASU 2021-08

By Audit, Financial Statement Audit, Financial Statement Review, Insights

In October 2021, the Financial Accounting Standards Board released Accounting Standards Update (ASU) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which clarifies how to properly account for deferred revenue in a business combination. This change was a long time coming after opposing views began to debate the proper treatment of deferred revenue after ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (also, ASC 606) went into effect.

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The Consolidated Appropriations Act 2021 Provides COVID Relief from Partial Plan Terminations

By Audit, Employee Benefit Plan Audits, Insights

The Consolidated Appropriations Act of 2021 (CAA), signed into law on December 27, 2020, includes a temporary rule providing COVID-related relief from certain partial plan terminations for employee benefit plans. Under this provision, a plan is not treated as having a partial plan termination during any plan year which includes the period beginning on March 13, 2020, and ending on March 31, 2021, if the number of active participants covered by the plan on March 31, 2021, is at least 80 percent of the number of active participants covered by the plan on March 13, 2020.

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Important Takeaways for Single Audits Under the CARES Act

By Audit, Financial Statement Audit, Financial Statement Review, Insights

There is no disputing that the intent of the Coronavirus Aid, Relief and Economic Securities (CARES) Act of 2020 is to provide immediate and tangible economic relief to American workers, families and small businesses. What has been less clear since its passage in March 2020 is how the acceptance of funds available through various CARES Act programs could impact single audit requirements.

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