AICPA News is a collection of recent announcements from the American Institute of CPAs and the Chartered Institute of Management Accountants.
AICPA Significantly Updates Digital Assets Practice Aid
The American Institute of CPA (AICPA) recently updated its practice aid, Accounting for and Auditing of Digital Assets, in response to the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60): Accounting for and Disclosure Of Crypto Assets. The practice aid offers a new definition for digital assets, new and amended accounting questions, and the introduction of new terms.
The updated version of Digital Assets Practice Aid includes vital information on how to account for and audit digital assets. It is essential guidance for those currently in the digital asset ecosystem or considering entering it especially as a financial statement preparer or an auditor. The document is written for those with a fundamental knowledge of blockchain technology, is based on existing professional literature and the experience of members of the Digital Assets Working Group and is specific to U.S. GAAP (for non-governmental entities) and GAAS.
Some of the new accounting questions answered in the updated Practice Aid include:
- Are “wrapped tokens” in the scope of FASB ASC 350-60?
- Are nonfungible tokens (NFTs) in the scope of FASB ASC 350-60?
- Are transaction costs (for example, commissions, gas fees) to acquire crypto intangible assets included in the initial measurement of the acquired asset?
- Are gains and losses from the remeasurement and sale of in-scope crypto intangible assets presented as operating or nonoperating items in the entity’s income statement?
As a result of this update, the entire Practice Aid now reflects the new terms with all new terms currently published in the AICPA Blockchain Universal Glossary. The updated Accounting for and Auditing of Digital Assets Practice Aid is available for AICPA members to view here.
AICPA Offers Strong Support for Bipartisan, Bicameral Legislation Postponing Federal Tax Deadlines for State-Declared Disasters
For years, the American Institute of CPAs (AICPA) has advocated for legislation which would provide authority to the Internal Revenue Service (IRS) to postpone certain deadlines when a state declares a disaster or emergency. Legislation introduced by Representatives David Kustoff (R-TN) and Judy Chu (D-CA) in the House (H.R.517) and Senators Catherine Cortez Masto (D-NV), John Kennedy (R-LA), Chris Van Hollen (D-MD) and Marsha Blackburn (R-TN) in the Senate would amend the Internal Revenue Code (IRC) to allow state-declared disasters to trigger a postponement of certain filing and payment deadlines, at the discretion of the IRS.
The current statute requires the IRS to wait for a federal disaster declaration, which cannot happen until after the disaster occurs, in order to grant deadline extensions. The process could mean those impacted must wait days or weeks following a disaster before a federal declaration is made. The legislation will provide taxpayers in the affected areas more peace-of-mind during a difficult time.
The bill does not eliminate the need for Congress to implement a permanent disaster tax relief bill, for which the accounting profession has long advocated, so that taxpayers are assured fair treatment in a timely manner.
AICPA Comments on Corporate Alternative Minimum Tax Proposed Regulations
In a letter recently submitted to the U.S. Department of the Treasury and the Internal Revenue Service (IRS), the American Institute of CPAs (AICPA) provided comments to recently proposed regulations of the application of the Corporate Alternative Minimum Tax (CAMT). The proposed regulations expand on interim guidance by providing rules and examples on computing an entity’s adjusted financial statement income, identifying applicable corporations that are subject to CAMT and other rules for controlled foreign corporations, foreign-parented multinational groups and partnerships with corporate partners.
In particular, the Treasury Department’s press release announcing the issuance of the proposed CAMT regulations indicates that approximately 100 companies are anticipated to pay the CAMT annually, with an average effective federal tax rate of 2.6 percent. The AICPA is recommending Treasury and the IRS to solicit feedback regarding potential approaches to reduce the compliance burden while maintaining the necessary level of precision in the determination of the CAMT liability for the targeted taxpayers (i.e., taxpayers with low effective federal tax rates).
Examples from the AICPA letter include:
Increasing the $500 million safe harbor for purposes of determining applicable corporation status.
A simplified methodology available to non-applicable corporations and/or applicable corporations with high effective federal tax rates.
An irrevocable election to use pretax book income as adjusted applicable financial statement income (AFSI) for CAMT liability purposes.
AICPA Expresses Strong Support for Bipartisan Discussion Draft to Improve IRS Administration
The American Institute of CPAs (AICPA) backs the release of the bipartisan Taxpayer Assistance and Service (TAS) Act discussion draft. The discussion draft, released by Senators Mike Crapo (R-ID) and Ron Wyden (D-OR), addresses critical tax provisions the AICPA has previously advocated for. The AICPA strongly supports and endorses the following provisions found in the TAS Act:
Sec. 101. Scanning and Digitization of Tax Returns and Correspondence.
Sec. 102. Establishment of Dashboard to Inform Taxpayers of Backlogs and Wait Times.
Sec. 103. Expansion of Electronic Access to Information about Refunds.
Sec. 104. Expansion of Callback Technology and Online Accounts.
Sec. 105. Improvement of Notices of Math or Clerical Error.
Sec. 108. Individuals Facing Economic Hardships Informed of Collection Alternatives.
Sec. 112. Postponement of Certain Deadlines by Reason of Disasters Made Applicable to Limitation on Credit or Refund.
Sec. 116. Modification of Rules for Postponing Certain Deadlines by Reason of Disaster.
Sec. 405. Operations to Assist Taxpayers Experiencing Hardships During a Lapse in Appropriation.
Sec. 504. Authority to Deny, Revoke, or Suspend Preparer Tax Identification Numbers.
Sec. 903. Quarterly Installments for Estimated Income Tax Payments by Individuals.
Sec. 904. Establishment of a Failure-to-Pay Penalty Safe Harbor for Individuals.
Sec. 905. Extension of Mailbox Rule to Electronic Submissions and Payments.
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Tags: Accounting, AICPA, cpa society
