Business Wisdom Blog

Monday, 14 September 2020

Coming soon: Updated rules for reporting convertible instruments

Written by Thomson Reuters

The Financial Accounting Standards Board (FASB) recently issued new guidance to simplify the accounting rules for convertible instruments and contracts in an entity’s own equity. Though narrower than initially proposed, the changes will provide investors with more-comparable information that’s easier to understand. Here are some FAQs about the changes.  Why are the rules changing?..

Published in Audit & Assurance
Monday, 14 September 2020

FASB to consider goodwill amortization for public companies

Written by Thomson Reuters

The Financial Accounting Standards Board (FASB) is currently researching an approach that would allow public companies to amortize goodwill. Here are the details of this ongoing project.  Reporting goodwill Goodwill is an acquired intangible asset that comes on the balance sheet through a business combination. The book value of goodwill is determined by deducting from the cost to buy a business the fair market value of tangible assets, identifiable intangible assets and liabilities obtained in the purchase...

Published in Audit & Assurance
Tuesday, 15 September 2020

Payroll Tax Deferral Guidance

Written by The Rehmann Team

On August 8, 2020, President Trump signed an executive memorandum that directed Treasury to defer the withholding, deposit, and payment of certain payroll taxes through the end of the year. On August 28, Notice 2020-65 was released providing additional guidance for employers. Key Points Deferral applies only to 6.2% social security tax withholding on wages paid during the period of September 1, 2020, through December 31, 2020 Only employees who make less than $4,000 in pre-tax wages on a bi-weekly pay period-by-pay period basis are eligible Executive memorandum only defers the payment of certain payroll taxes – without further action any deferred amounts have to be repaid Employers are responsible for the repayment of the deferred taxes done ratably from January 1, 2021 to April 30, 2021 No penalties or interest will be assessed on the deferred amounts as long as they are repaid before May 1, 2021 Employers can make arrangement with employees on how they choose to collect the repaid amounts but generally it will be through doubling the social security tax withholding during the repayment period The notice does not state whether employers can opt out of deferring payroll taxes, however, prior to the notice release, Treasury Secretary Mnuchin indicated it will not be mandatory Takeaway Factoring in the additional guidance included in Notice 2020-65, we still strongly recommended clients do not consider implementing the deferral option at this time...

Published in Tax
Tuesday, 15 September 2020

The ever-changing landscape of nexus for income and franchise taxes

Written by Michael R. Bannasch, CPA, MST

Economic nexus – a state’s ability to subject a business to tax when the business is not physically present in the state – has been a much-debated topic in state and local income/franchise taxes for more than 25 years. In the sales/use tax realm, the U.S. Supreme Court clearly stated since 1967 that physical presence was required for nexus, until it reversed course in 2018 with the Wayfair case to say that economic nexus is valid for sales/use tax, in addition to physical presence nexus...

Published in Tax
Monday, 14 September 2020

Hot topics for public company audit committees

Written by Thomson Reuters

The COVID-19 crisis has dramatically altered the business world, creating new risks, uncertainties and, in some cases, opportunities. What are audit committee chairs most concerned about during these unprecedented times? Ongoing outreach project Each year, the Public Company Accounting Oversight Committee (PCAOB) actively reaches out to capital market participants to identify critical issues that audit committees are dealing with. In 2019, during PCAOB audit inspections, nearly 400 audit committee chairs of U...

Published in Audit & Assurance
Monday, 14 September 2020

Tax Relief And Loan Forgiveness: Updates On PPP, PPPFA

Written by Kimberly Schwaiger, CPA

Whether the tumultuous events of 2020 led to you closing your shop doors temporarily, or your business remains open with a reduced workforce, or you’ve pivoted operations to something else entirely, you’re likely contemplating how to lock in the long-term success of your business. We face a long journey of recovery ahead. But we’re all striving to find productive ways of settling into our new reality. Now is the time to not only renew, restart and rebuild, but also re-imagine all that can be...

Published in COVID-19
Monday, 14 September 2020

4 critical IT questions to ask when buying or investing in a company

Written by Ken Zimmer and Chris Rosmarin, CPA

While a company’s financials are arguably a top concern in the merger and acquisitions (M&A) process, equally as important is the state of an organization’s information technology environment – now more than ever, given the vulnerabilities businesses face and the increases in cybersecurity attacks during these turbulent times. Of the many disruptions taking place this year – and likely into 2021 and possibly beyond – technological challenges are proving significant, both in cost and how they’re impacting businesses of all sizes. While information technology concerns often are viewed as simply that – IT issues – they’re in fact much more and are affecting small- and mid-size businesses as well as larger companies. IT security, as well as IT continuity, are not “an IT thing,” but rather an essential business risk discussion – a discussion that needs to be explored prior to the purchase of a new entity...

Published in Private Equity

More remote workers are prompting employers to critically consider cybersecurity protocols while keeping employees engaged and connected. From assessing remote capabilities and setting expectations, to implementing procedures and preventing cyber breaches, the following steps will help ensure remote workforce success moving forward. Assess your company’s remote work capabilities. For many companies, this shift to remote working happened almost overnight, leaving little time for adequate planning...

Published in Cybersecurity
Tuesday, 01 September 2020

Reminder: Management is responsible for going-concern assessments

Written by Thomson Reuters

Going-concern issues are in the spotlight during the COVID-19 crisis. Under U.S. Generally Accepted Accounting Principles (GAAP), management, not auditors, is responsible for stating whether there’s substantial doubt about a company’s ability to continue as a going concern...

Published in Audit & Assurance
Tuesday, 01 September 2020

FASB proposes another delay for updated insurance standard

Written by Thomson Reuters

On July 9, the Financial Accounting Standards Board (FASB) issued a proposal that would give insurers an additional year to implement the updated accounting standard for long-duration contracts. Insurers requested the delay in light of COVID-19 challenges. Update calls for major changes Accounting Standards Update (ASU) No. 2018-12, Financial Services — Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued in August 2018 to improve and simplify the reporting requirements for long-term insurance policies...

Published in Audit & Assurance
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