Current practice issue
New tangible property (repair) regulations
As an update to the September 25, 2012 On the Horizon practice issue, in November the IRS issued a notice that the effective date for 2011 tangible property repair regulations will be amended from January 1, 2012 to January 1, 2014. Until the amendment, the effective date remains January 1, 2012. These interpretive regulations may impact the recognition and measurement of income tax positions, the entity's effective tax rate, and disclosures. For additional information, see Tax Flash 2012-08, "Effective date for 'repair' regulations will be extended."
FASB
Private Company Council holds inaugural meeting
At its first meeting on December 6, the newly created Private Company Council (PCC) identified four areas for initial research and consideration:
- Consolidation of variable interest entities
- "Plain vanilla" interest rate swap accounting
- Accounting for uncertain tax positions
- Fair value measurement and recognition for intangible assets, other than goodwill, acquired in a business combination
The PCC was formed in May by the Financial Accounting Foundation (FAF)'the governing body of the FASB' for the purpose of determining whether and when to modify U.S. GAAP for private companies.
See FAF Private Company Council for further information about the PCC and its activities.
Nonpublic entities webcast scheduled for December 13
The FASB is presenting an educational webcast, In Focus: FASB Update for Nonpublic Entities, from 1:00 to 2:40 p.m. EST on December 13. FASB members and staff will discuss
- The initial PCC meeting
- The Private Company Decision-Making Framework project and the definition of "nonpublic entity"
- The Not-for-Profit Advisory Committee
- Projects in progress'not-for-profit financial reporting, disclosure framework, leases, revenue recognition, and financial instruments, among others
SEC staff updates Compliance and Disclosure Interpretations
The Compliance and Disclosure Interpretations described below reflect the views of the SEC staff. They are not rules, regulations, or statements of the Commission and have not been approved by the Commission. The interpretations are intended as general guidance and should not be relied on as definitive.
On December 4, the SEC's Division of Corporation Finance added Section 147 to its Compliance and Disclosure Interpretations (CDIs) to address the new Section 13(r) of the Exchange Act. Section 13(r) was added by the Iran Threat Reduction and Syria Human Rights Act of 2012 and requires an issuer to disclose, on an annual and quarterly basis, its or its affiliates' engagement in certain business activities relating to Iran.
The CDIs clarify that
- Disclosure is required for a report with a due date after February 6, 2013 for all transactions that occurred during the period covered by the report, regardless of whether such reports are filed earlier.
- The definition of "affiliate" for purposes of Section 13(r) is as defined in Exchange Act Rule 12b-2.
- No disclosure is required if an issuer and its affiliates have not engaged in any of the activities specified in Section 13(r)(1).
- Both general and specific licenses issued by the U.S. Department of the Treasury constitute authorization to engage in a transaction, eliminating the disclosure requirement.
Additional disclosure information can be found in NDS 2012-07, "CAQ issues SEC Regulations Committee highlights."
EITF revises agenda for January meeting
The Task Force added an issue to its January 17, 2013 meeting agenda: Issue 13-C, Presentation of a Liability for an Unrecognized Tax Benefit When a Net Operating Loss or Tax Credit Carryforward Exists.
Materials for the January meeting are posted to the FASB website as they become available.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
