Congratulations to the following members, who enrolled in our automatic membership renewal program by May 1, and won our prize drawing:

  • Brian Boone, CPA (Sacramento Chapter): VPE 40
  • Richard Hansen (Inland Empire Chapter): Amazon Echo

To enroll in automatic renewal for 2017-18 membership, visit www.calcpa.org/autorenewal.


GASB Rules for Accounting for Certain Debt Extinguishment

GASB issued a new standard for state and local government to apply when accounting for extinguishment of debt prior to its maturity.

In Statement No. 86, Certain Debt Extinguishment Issues, GASB establishes rules for accounting for transactions in which cash and other monetary assets acquired with only existing resources are place in an irrevocable trust for the sole purpose of extinguishing debt.

Current GASB standards already provide guidance for accounting and reporting when cash and other monetary assets acquired with the proceeds of refunding bonds are placed in a trust for the future repayment of outstanding debt.

The standard is effective for reporting periods beginning after June 15, 2017, and GASB encourages earlier application.


Cybersecurity Risk Management Assistance

Organizations are under increasing pressure to demonstrate that they are managing cybersecurity threats—and that they have effective processes and controls in place to detect, respond to, mitigate and recover from breaches and other security events.

To address this market need, the AICPA has developed a cybersecurity risk management reporting framework that assists organizations as they communicate relevant and useful information about the effectiveness of their cybersecurity risk management programs.

The framework is a key component of a new System and Organization Controls for Cybersecurity engagement, through which a CPA reports on an organizations’ enterprise-wide cybersecurity risk management program.


New Standard to Enhance Auditor’s Report Relevance, Usefulness

The Public Company Accounting Oversight Board adopted a new auditing standard to enhance the relevance and usefulness of the auditor’s report by providing additional and important information to investors.

The new standard and related amendments require auditors to include in the auditor’s report a discussion of the critical audit matters, which are matters that have been communicated to the audit committee, are related to accounts or disclosures that are material to the financial statements, and involved especially challenging, subjective or complex auditor judgment.

Further, the auditor’s report will disclose, among other things, the tenure of an auditor, specifically, the year in which the auditor began serving consecutively as the company’s auditor. It also will include the phrase, “whether due to error or fraud,” in describing the auditor’s responsibility under PCAOB standards to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements.

The standard is effective for new auditor’s report format, tenure and other information for fiscal years ending on or after Dec. 15, 2017.


Converting from Inactive or Retired Status to Active?

If you’re considering converting your inactive or retired licensure status to an active status, here’s something to keep in mind: CBA regulations require criminal background checks for all licensees who have either not been previously fingerprinted as a condition of licensure or for whom no record of the licensee’s fingerprints exists in the Department of Justice’s criminal offender record identification database.

The CBA cannot restore an inactive or retired status license to active status until the licensee has complied with this requirement. Affected licensees must submit fingerprints and successfully complete a state and federal background search as a condition of restoration to active status.

For more information, see the Fingerprinting FAQs on the CBA website.


Consent to Certain Changes in Accounting Methods

The FTB issued FTB Notice 2017-03 to advise taxpayers and their representatives that it withdrew FTB Notice 96-3. FTB Notice 96-3 announced that the FTB would not follow the procedures for a change of accounting method involving previously unclaimed, but allowable depreciation or amortization deductions, as provided by Revenue Procedure 96-31, issued by the IRS effective May 13, 1996, (1996-1 C.B. 714).

The IRS has periodically updated the procedures for a change of accounting method involving previously unclaimed, but allowable depreciation or amortization deductions, most recently with Revenue Procedure 2016-29. Accordingly, the FTB follows the provisions of Revenue Procedure 2016-29. Because the FTB does not provide automatic consent to accounting method changes, an accounting method change under Revenue Procedure 2016-29 or any of its earlier versions may only be made if the taxpayer has a deemed California election or with prior consent from the FTB.

FTB Notice 2000-8 provides additional information regarding California’s conformity to federal elections and the method of electing a change of accounting method for California purposes.