Construction

Senate Majority Leader Harry Reid, D-Nev., wants to change a House-passed measure that would repeal a requirement that governments withhold 3% of payments to contractors. Reid wants to ensure that it would apply only to contractors that are current on their tax obligations. Such a change would have to go back to the House for another vote. If Reid’s proposal is adopted, federal, state and local governments might have difficulty determining whether a contractor is tax-delinquent. Read more»

The Financial Accounting Standards Board and the International Accounting Standards Board are considering the comments on an initial exposure draft for lease accounting, and plan to release a revised draft early next year. Officials made several concessions in response to criticism of the first exposure draft, but left one of the most controversial of the proposed changes: a requirement that companies split their rent expenses on the income statement into an amortization expense and an interest expense. Read more»

Democrats and Republicans alike favor repeal of a requirement that federal, state and some local governments withhold 3% of payments to contractors, a measure meant to target tax evasion. But the parties differ on how to replace the expected revenue, which has been estimated to total nearly $7 billion over five years. The AICPA supports the repeal of the 3% withholding rule. Read more»

The Financial Accounting Standards Board released an Accounting Standards Update that requires employers that contribute to multiple-employer pension plans to disclose more information than in the past. Previously, employers had to release the total amount contributed to such plans, but now they must disclose specific information about their contributions to significant pension plans, and whether those plans are subject to funding improvement plans, among other things. Read more»

The Financial Accounting Standards Board approved revised standards requiring companies to provide more data about pension plan obligations for unionized workers. New data required under the standard includes the contributions made to each plan and whether the employer contributes more than 5% of the total contribution. Read more»

The Financial Accounting Standards Board and the International Accounting Standards Board announced Wednesday their intent to re-expose their revised revenue recognition proposal during the third quarter. The move follows joint deliberations on stakeholder feedback received from a June 2010 exposure draft that would create a single revenue recognition standard for both U.S. GAAP and International Financial Reporting Standards. Read more»

The Financial Accounting Standards Board’s proposal to reclassify operating leases as debt would increase debt levels and reduce earnings of many large corporations. Companies in the Standard & Poor’s 500 have at least $549 billion in operating leases, according to estimates by David Zion, an accounting analyst at Credit Suisse. Read more»

The Financial Accounting Standards Board and the International Accounting Standards Board reversed a compromise offered to the leasing industry, deciding they won’t establish a two-model approach for lease accounting. Instead, they are sticking to their original, single-model proposal. The boards originally proposed that all leases be treated as financing transactions. Companies protested that short-term leases should be treated as simple rental agreements, so the boards agreed to develop a two-model approach. Read more»

A bill that would repeal a provision forcing the government to withhold taxes from payments to contractors is gaining acceptance in Congress. Rep. Wally Herger, R-Calif., a senior member of the House Ways and Means Committee, likens this momentum to the bipartisan support that repealed the 1099 provision in the health care law. Read more»

A coalition of more than 100 groups has called for the repeal of a provision that starting next year would require 3% withholding on payments to government contractors, as well as on Medicare, certain Department of Agriculture payments and other payments. The provision is criticized as likely to cause administrative problems for government contractors and state and local governments that would have to comply with the withholding requirement. The AICPA has also sent a letter to Congress urging repeal. JournalofAccountancy.com