Accounting & Business Advisory Blog

Uncertain Tax Positions: Lessons Learned and a Look Forward

By R. Michael Sorrells, CPA

ASC 740-10, Accounting for Uncertainty in Tax Positions (formerly FIN 48) was required to be implemented by "public" non-profits, such as those with certain tax-exempt bonds for years beginning after December 15, 2006. However, the vast majority of nonprofit organizations were allowed to defer this requirement until years beginning after December 15, 2008 (generally calendar year 2009 and fiscal years beginning in 2009). This is mandatory for all organizations who issue financial statements in accordance with generally accepted accounting principles.

Click here to read the rest of this story.

Establishing Effective Procedures for a Nonprofit

By Lee Klumpp, CPA

As part of our ongoing series on Nonprofit Governance, this article discusses best practices in designing and developing an organization's procedures to support its overall policies and the internal control of the organization. Remember like policies, internal controls and procedures vary from organization to organization.

Click here to read the rest of this story.

FASB Lease Exposure Draft - August 2010: Effects on Nonprofit Organizations

By Richard F. Larkin, CPA

The Financial Accounting Standards Board (FASB) (in conjunction with the International Accounting Standards Board) has issued its long-awaited exposure draft on accounting for leases. While implementation of the proposed standard will likely not have a major impact on the statement of activities of most lessees, its effects on the balance sheet (statement of financial position) will often be significant.

Click here to read the rest of this story.

Final 2010 OMB Circular A-133 Compliance Supplement Issued

By Tammy Ricciardella, CPA

The Office of Management and Budget (OMB) issued the final 2010 Circular A-133 Compliance Supplement (the Supplement) dated June 2010. The Supplement is available on OMB's website at http://www.whitehouse.gov/omb/circulars/a133_compliance_supplement_2010 in both a pdf and word format. The full version of the Supplement is over 1,400 pages in length. You can download the entire Supplement or sections of the Supplement from the website. The Supplement is applicable to audits of fiscal years that begin after June 30, 2009.

Click here to read the rest of this story.

Healthcare Reform: Challenges Ahead for U.S. Employers

By Karen Fitzsimmons, CPA

The enactment of the recent healthcare reform legislation will affect and present challenges for everyone from healthcare providers, insurance companies, and employers to individuals.

Employers will need to prepare in order to manage through the new mandates, changing tax implications and potential shifts in cost. One major cost shift is the expansion of the State Children's Health Insurance Program (SCHIP) providing coverage to more children. The Patient Protection and Affordable Care Act's (The Act) primary goals are to expand coverage to Americans without health insurance, lower the costs of providing healthcare, and put in place reforms to improve the overall quality of the delivery of healthcare. The following is a summary of what the Act will do and when.

Click here to read the rest of this story.

New Health Care Tax Credit

Under a provision of the recently passed Patient Protection and Affordable Care Act, certain small tax exempt organizations will be eligible for a tax credit for health care insurance expenses beginning in 2010. The credit is not insignificant: for tax years 2010 to 2013, the maximum credit is 25% of premiums; in 2014 the maximum increases to 35%. The maximum credit goes to smaller employers-those with 10 or fewer full-time equivalent employees (FTEs) and paying annual average wages of $25,000 or less. The credit is completely phased out for employers that have 25 FTEs or average wages of $50,000 or more.

Click here to read the rest of this story.

Other Not-for-Profit Tax Items in the News

By Joyce Underwood, CPA

Cell Phone Change to Become Law September 23, 2010

The House passed, and the President is expected to sign, H.R. 5297, the Small Business Jobs Act of 2010. This bill includes the provisions discussed in our June Nonprofit Standard, removing cell phones from the definition of listed property which eliminates the onerous recordkeeping to substantiate business use of a cell phone. Lack of substantiation and not including personal use as income to an employee under prior rules could result in an automatic excess benefit transaction and possible application of intermediate sanctions on exempts. When signed into law, the de-listing will be retroactive to January 1, 2010.

Click here to read the rest of this story.

Recent Accounting Standards Updates and Exposure Drafts Issued

By Richard F. Larkin, CPA

The following is a summary of several recently issued accounting standards updates (ASU) and exposure drafts.

ASU

SFAS 157 and its various amendments require extensive disclosures, including new disclosures required by ASU 2010-06. These include:

• A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value (FV) measurements and describe the reasons for the transfers; and

• In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present information about purchases, sales, issuances, and settlements separately (gross rather than net).

Click here to read the rest of this story.

Regulation of Tax Exempt Bonds

The regulation and oversight of the municipal debt and bond market is performed by the Municipal Securities Rulemaking Board (MSRB). One of MSRB's top initiatives has been the development of the Electronic Municipal Market Access (EMMA) website. On July 1, 2009, the MSRB began collecting disclosure documents from municipal issuers around the country and posting them for public access. As a result, EMMA is a complete repository of municipal bond disclosure documents. Nonprofit organizations with bonds should be aware that their data may be posted and available on the EMMA website.

Click here to read the rest of this story.

Should your Organization make the 501(h) Lobbying Election?

By Laura Kalick

If you are an executive of an Internal Revenue Code (IRC) 501(c)(3) public charity that engages in any legislative activity, you should consider whether the organization should make the IRC section 501(h) election. If an IRC 501(c)(3) public charity engages in "substantial" lobbying activities its exempt status could be revoked.1 As to what is "substantial," there is no clear definition. The 501(h) election allows a 501(c)(3) public charity to use a bright line expenditure safe harbor instead of the facts and circumstances test in determining whether an organization is engaged in substantial lobbying.

Click here to read the rest of this story.

The Ever Changing Regulatory Environment of the Federal Government

By Lee Klumpp, CPA

The regulatory environment for those who receive federal funds is constantly changing these days. Some might say that the changes are related to current political and regulatory agendas being pursued. However, if you really take a look at the changes, a significant number of them have been in the name of accountability and transparency, which is a good thing. We seem to have forgotten about the days prior to the Single Audit Act of 1984 when each federal agency had the authority to require an audit of each federally funded program or activity; there was no coordination among the federal agencies or sometimes even departments of the same agency, causing audit overlaps and organizational inefficiencies.

Click here to read the rest of this story.

If you have any questions, please post a comment below or contact our Nonprofit Services Group at 440-449-6800.