Financial Reporting-Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern

Financial Reporting-Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern

 Auditing standards have long required an auditor to evaluate whether there is a substantial doubt about an entity’s ability to continue as a going concern for a reasonable period of time as well as requiring certain reporting and footnote disclosures.  In response to diversity in practice, as well as the lack of authoritative guidance from a financial reporting standpoint, the Financial Accounting Standards Board (FASB) has recently issued ASU 2014-15.

The main provisions of ASU 2014-15 include:

  • “Substantial doubt” exists when the aggregate relevant condition and events indicate it is “probable” the entity will be unable to meet its obligations as they become due…
  • …for a period of one year from the financial statements issuance date
  • “Probable” is used consistently with its use in FASB Codification Top 450. Contingencies
  • Disclosures are required when there is a substantial doubt or when substantial doubt is alleviated by management plans

Effective Date:  Annual reporting periods beginning after December 15, 2016 with early application permitted.

For questions or additional information, contact brent@brookslodden.com.

Pension Plan and Other Contribution Limitations for 2015

Pension Plan and Other Contribution Limitations for 2015

The IRS has announced the 2015 cost of living adjustments for retirement plans contributions as well as the social security wage base.  The chart below summarizes the amounts put in place for 2014 and the updated amounts for 2015.

2014 Amount

2015 Amount

401(k), 403(b), 457 maximum deferral

$   17,500

$   18,000

401(k), 403(b) 457 catch-up (age 50 and older)

$     5,500

$     6,000

SEP IRA, solo 401(k) maximum contribution

$   52,000

$   53,000

SIMPLE IRA maximum contribution

$   12,000

$   12,500

SIMPLE IRA catch-up

$     2,500

$     3,000

IRA maximum contribution

$     5,500

$     5,500

IRA catch-up

$     1,000

$     1,000

Social Security Wage Base

$ 117,000

$ 118,500

Maximum FICA – Employee

$     7,254

$     7,347

Maximum FICA – Self Employed

$   14,508

$   14,694

For more information please contact:

Tony Wagner, CPA, CGMA

515-223-7300

tony@brookslodden.com

 

Dawn Reseland, CPA

515-223-7300

dawn@brookslodden.com

Financial Reporting-Elimination of Special Reporting for Development Stage Entities

Financial Reporting-Elimination of Special Reporting for Development Stage Entities

 In response to input from financial statement users, the Financial Accounting Standards Board (FASB) has recently issued ASU 2014-10, which essentially repeals the complex incremental financial reporting requirements for entities defined as “development stage” under existing GAAP.

Under ASU 2014-10:

  • The definition of a development stage entity is removed from the FASB codification Master Glossary
  • The requirement of presenting inception-to-date information is eliminated
  • The financial statement labeling and specific disclosure requirements related to such entities is eliminated

Effective Date:  Annual reporting periods beginning after December 15, 2014 with early application permitted.

For questions or additional information, contact brent@brookslodden.com.

Financial Reporting-Change to Variable Interest Entity (VIE) Guidance

Financial Reporting-Change to Variable Interest Entity (VIE) Guidance

Under ASU 2014-07, private companies may now elect an alternative not to apply the existing VIE guidance to lessor entities under common control, if certain criteria are met.  This update was issued to address concern of private company stakeholders that the benefit of applying the existing guidance doesn’t justify the costs.

This alternative may be elected when an entity has a lease arrangement with a lessor entity under common control, provided:

  •  The two entities are under common control 
  •  Substantially all of the activities between the two entities are related to the leasing activities 
  •  If the lessee explicitly guarantees or provides collateral for any obligation of the lessor entity    and the principal amount of the obligation doesn’t exceed the value of the asset leased

Under the alternative, the lessee would be required to provide certain disclosures about the lessor entity, most of which would be related to the related party aspects of the arrangement and guarantees, if applicable.

Effective Date:  Annual reporting periods beginning after December 15, 2014 with early application permitted.

 For questions or additional information, contact brent@brookslodden.com.

Financial Reporting – Accounting for Goodwill

FINANCIAL REPORTING-ACCOUNTING FOR GOODWILL

The Financial Accounting Standards Board (FASB) has recently issued ASU 2014-02, which applies to all entities except public companies, nonprofits and employee benefit plans.

The ASU allows for an accounting alternative for goodwill, under which the entity may elect to amortize goodwill over a ten year (or lesser, in certain instances) period.  An electing entity will need to continue evaluating goodwill for impairment.

Effective Date:  Annual reporting periods beginning after December 15, 2014 with early application permitted.

For questions or additional information, contact brent@brookslodden.com.