GAAP Flash – Taxes, Bitcoin, PCAOB’s new chair, and Millennials – 01.05.18
GAAP Flash – Taxes, Bitcoin, PCAOB’s new chair, and Millennials – 01.05.18

GAAP Flash – Taxes, Bitcoin, PCAOB’s new chair, and Millennials – 01.05.18

In case you completely checked out over the holidays, this week’s GAAP Flash is intended to bring you up to speed on various items such as the new tax bill wreaking havoc on fourth-quarter earnings, Bitcoin regulation, the PCAOB naming a new chairman, and discussing the results of a Millennial workforce survey. We hope you had an enjoyable holiday and wish you all the best in 2018!

Taxes and the terrible, horrible, no good, very bad fourth-quarter earnings season (January 4, 2018) – Wall Street Journal (@WSJ)

I didn’t expect the new tax bill to be signed before the end of 2017, but it was signed into law right before Christmas (Merry Christmas!). Because the new bill was signed before the new year, some calendar-year companies will be required to recognize significant fourth-quarter expenses. This article states that even though it will be one of the “weirder” earnings seasons in years thanks to the new tax law, it will eventually have a large boost to corporate profits – but not before it wreaks havoc on fourth-quarter earnings.

How It’s Relevant: So, how does this new tax law impact fourth-quarter earnings? Well, companies will be required to write-down the value of their deferred tax assets due to the overall decrease in corporate tax rates from 35% to 21%. These assets are not worth as much at the lower tax rate and since the law was enacted prior to December 31, 2017, the write-down must be recognized in the fourth-quarter. Additionally, companies are also required to recognize a one-time tax in the fourth-quarter on stockpiled foreign profits. BP is expecting a $1.5 billion fourth-quarter charge due to the tax law changes! This earnings season should be fun to watch!

Bitcoin: The rise of the regulators (January 4, 2018) – Wall Street Journal (@WSJ)

This article discusses how bitcoin has caught the attention of various regulators across the world and also includes a fun little video summarizing various regulator actions. China has completely shut down its biggest cryptocurrency exchanges, yet the US has approved the trading of bitcoin futures. The regulations are all over the place, just like the price of bitcoin! How will regulations around cryptocurrencies impact the market? Will they kill bitcoin all together or will they attract more investors by making the market safer?

How It’s Relevant: I don’t know about you, but I took a break from bitcoin articles over the holidays! Thinking about the amount of investments people are willing to make in these markets (I know a guy that swears by it) fascinates me. The regulations and strategies surrounding these markets are only going to evolve in 2018 so it will be exciting to watch what happens! For more information on Bitcoin pricing, check out this article.

PCAOB swears in new chairman William Duhnke (January 2, 2018) – Accounting Today (@AccountingToday)

In case you missed the news over the holidays, the SEC named a new PCAOB chairman and that new chairman, William (Bill) Duhnke, was sworn in this week. Prior to his new position as PCAOB chairman, Duhnke was staff director and general counsel to the US Senate Committee on Rules and Administration. Duhnke succeeds James Doty, who had been the chairman since 2011.

How It’s Relevant: The SEC also appointed three new board members, which in effect will replace the current board. The PCAOB has been busy lately, announcing updates to the auditor's report, and a $1.5 million penalty against Grant Thornton for audit failures. It will be interesting to see how the new chairman will begin his “regime” with companies adopting the new revenue recognition standard, ASC 606 – stay tuned!

'Work-life balance' top priority for Millennials, global survey finds (January 3, 2018) – Accounting Today (@AccountingToday)

A new global survey from World Services Group found that among young professionals in North America (as well as the rest of the world), work-life balance was the biggest priority in their professional lives, beating out wealth and leadership opportunities. The survey, which is called The Generation Now Survey, polled over 1,500 young professionals in order to understand what makes this generation tick.

How It’s Relevant: Millennials are the largest generation in the US labor force so understanding what’s important to them is crucial for an organization! The next most important priority to millennials as noted in the survey was building their wealth. Millennials also noted that the complexity of work/tasks performed was the most enjoyable aspect of their job, along with people and culture. Do you know where you can find a great work-life balance, complex work and a phenomenal team? GAAP Dynamics! And wouldn’t you know – GAAP Dynamics is hiring!


Disclaimer  

This post is published to spread the love of GAAP and provided for informational purposes only. Although we are CPAs and have made every effort to ensure the factual accuracy of the post as of the date it was published, we are not responsible for your ultimate compliance with accounting or auditing standards and you agree not to hold us responsible for such. In addition, we take no responsibility for updating old posts, but may do so from time to time.

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