Accounting Theory of Finance- Free-Samples - Assignmenthelp.com

Questions: 1.You are required to find a Newspaper articles which is from professional journal like in In The Black, CAANZ etc major issue should be highlighted and relate them with the concept of article and theories like normative theories, positive theories, measurement issue. 2.Explain assumption behind three theories like Public Interest, Private Interest and Capture Theories and evaluate which one best explain each of the comment letters. Answers: 1.This is an article published on 16th January 2017 in accounting today that explains about the new tax rules for 2017. It is seen that the New Year looks to be a demanding one for the people who practice tax as the new elected President of USA, Donald Trump and his fellow Republican have assured to perform a tax transformation packages in the year 2017. Conversely, if there is no new law, the tax consultant still requires handling a large number of changes in tax that have been implemented for the first time in this year or are applicable for the first time for tax returns that will be documented this year (Appelbaum et al., 2013). The article that in discussion provides a summary of all such changes in tax, other than manifesting alterations and the transformations that have been established by the failure of the Congress, to act as a package of the extenders to bring back the tax provisions that had finished with the end of the year 2016. The various changes that are in order to be included are discussed below: Higher floor beneath medical expenses for the seniors The tax year that is starting after December 2016, it is seen that the floor under the deductions that are itemized for the medical expenditure of the tax payers who are of the age of 65 years and above, is raised from 7.5 percent to AGI to 10% of the AGI (Liu et al., 2014). Some Taxpayers may require new ITINS It is seen that an individual who is documenting their return on tax in USA is required to reveal their taxpayer identification number while filing and paying their return. The taxpayer identification number is referred to as an Individuals Social Security Number. Conversely, in situations when the people who are not issued Social Security Number as they are not eligible, but they are to file their tax returns, the IRS provides individual taxpayer identification numbers that can be used with respect to the individuals tax filing needs (Brownlee 2016). It is seen that the 2015 Protecting Americans from the Tax Hikes Act has provided that an ITIN will get terminated if a person is unable to file their tax returns for three years consecutively. It is seen that under this new rule, the individuals who possess an ITIN that have not been utilised for once in the past three years will no longer be able to utilize that ITIN on a tax returns from January 1 2017 (DeLong et al., 2016). Furthermore, people who have been given ITINs before the year 2013 are needed to renew their ITINs on a astounding schedule between 2017 and 2020. Conversely, only the holders of ITIN who are required to file a tax return in the year 2017, requires renewing their ITINs and the others are not required to undertake any actions. Accelerated due dates for W-2s, 1099s, The wages that are paid to the staffs and employees and the taxes that are subtracted from the wages of the employees before 2016, the employers are to file these tax in Form W-2 with the Social Security Administration by the end of 28Th February of this year and following the calendar year for which the tax return had to be documented making use of the Form W-3, that is a Transmittal of Wage and Tax Statements, for the people for whom the W-2s, the expiry data for returns electronically filed was March 31st. Additionally for payments that are before 2016, the tax payers had to file forms in the series of 1099 with the IRS on the last day or before February of that year by following the calendar year for which the return had to be paid (Gammon et al., 2016). For those of 1099, the expiry date for the return information that was electronically filed was March 31st. With respect to the 2015 PATH Act, starting with the forms that were documented in 2017, the Forms W-2, W-3 and the returns to the statement of the non-employee remuneration requires to be documented before or on 31st January of the year that follows the financial year to which such returns are associated. It is seen that these returns are no longer qualified for the elongated date of filing that will be doe electronically documented returns (Hallerberg Scartascini 2016). Furthermore, the increase of time to file W-2 with the SSA is found to be non-automatic. It is seen that for the filing of returns that are on or after January 01 2017, the taxpayers may ask for an extension for thirty days by submitting Form 8809, the Application for Extension of Time to File Information Returns. Revised due-date for partnership and C corporations returns It is seen that under the Surface Transportation and the Veterans Health Care Choice Improvement Act of 2015 that will be active commonly for any returns for the tax year that starts after 31st December 2015 (Freedman2017). The partnerships along with the S corporations, requires filing their taxes before the 15th day of the third month after the taxation year ends. In case of returns that are paid before hand, the partnerships are to file by the 15th day of the fourth mo nth after the expiration of the taxation year. It is seen that C corporations are required to file within the 15th day of month four after the conclusion of the taxation year. Conversely, for the C corporations with the taxation year that ends on June 30, the return date stays to be the 15th day of the third month after the conclusion of the tax year (Martorano 2016). The corporations having short tax years that ends anytime in June are looked as the year had ended on June 30 and they are required to file within the 15th day of the third month. Revised automatic extension rules for corporations Under the Surface Transpiration and Veterans Healthy care Choice Improvement Act of 2015, that is effective for the tax payers returns that starts after December 2015, that starts after 31st December 2015 that are for the 2016 tax year returns that are documented in the year 2017, the three month automatic extension during the time for the returns of the corporate in Code Sec.6081 (b) is transformed to be an mechanical six month extension (Konvisarova et al., 2016). Safe harbor for the de minimis errors on information returns and the payee statements It is seen that in general, except where there is justifiable cause and no wilful abandon and has few other exceptions, a malfunction to bring in all the information that are necessary to be revealed on the information return or a statement of payee in accordance to a return on information, or any addition of wrong information on a return on information or payee statement will lead to penalty (Accounting Today 2017). There are various factors that decide the penalty amount and this includes whether the taxpayer is a small business. Qualified Small employer HRAs exempt from ACA market changes requirements It is commonly effectual for the year initiates after 31st December 2016; the 21st Century Cures Act reveals that a skilled small employer HRA is not regarded as a group health scheme for the purpose of income tax, as transformed and not enduring any other provisions. There are various exceptions that are similar for ERISA and the Public Health Services Act intensions (Plummer 2016). Therefore, under this act, a skilled employer HRA wills not facade the Affordable Care Act market transformations needs. Transformations for the alternative tax election by non-life insurance companies With respect to the former Code Sec, 831 (b), the non-life insurance companies with the premiums that are new written or the direct written premiums if increased not more than $1.2 million in the taxation year that could be chosen to be taxed at a normal corporate rate, only on the investment income and not being taxed on the underwriting income and the investment income. Under the 2015 Protecting Americans from the Tax Hikes Act for the taxation years starting after 31st December 2015, the $1.2 million maximum value of annual premiums rising to $2.2 million and is regulated for the effect of inflation (Accounting Today 2017). Furthermore, for the tax payers that start after 31st December 2016, a classification need is applicable if a non-life insurance organization makes the election. Increased User fees for pre-filling agreements The process of pre-filling agreement permits the large business and the taxpayers who are international to ask for an investigation and determine particular issues that are associated to the returns that are not due or are filed. The taxpayers have to pay a user fee if they are elected to participate in the PFA program, Under Rev Proc 2016-30, 2016-21 IRB, for PFA requests that are presented on or after January 1 2017, the fee rises from $134,000 to $ 218,600. It is seen that a fee is examined for each distinct and separate issue (Accounting Today 2017). Therefore, it can be said that these changes in the taxation can be useful for computing the accounts for the businesses and individuals. 2.The paper looks to analyse the improvement proposals laid down by FASB (Financial Accounting Standards Board) with respect to the Employee Share-Based Payment Accounting that is related to the Compensation Stock. It is seen that four respondents were taken into consideration who provide comment on the exposure draft and the analysis of the paper reveals that surplus tax benefit and deficiency recognition in the income statement should not be undertaken and a Symmetrical Equity Approach should be implemented in order to reduce the volatility of the expenses from the Income Statement. Introduction There are various accounting standards that are being introduced and recommended by the Financial Accounting Standard Boards and the Board prefers comments and exposure drafts from the various industries and corporate bodies. It is seen that the feedback from the various corporate bodies is influential for the financial boards to undertake changes in their accounting standards that will improve the standards that will help the corporate bodies to implement these standards. The proposal that is under discussion involves the proposed accounting standards and updating compensation stock compensation with the topic number being 718. The accounting standard that is under consideration is Improvements to Non-employee Share-Based Payment Accounting. It is seen that improvements in the non-employee share-based payment accounting is important for the decrease in the cost and complexities that are seen while maintaining and developing the information usefulness that are given out by the financial reports (Peterson et al., 2014). The paper has taken into consideration four respondents out of the overall comments that have been given in the accounting board websites. It is seen that the analysis of the four comments from the respondents will be influential for the analysis of the accounting standards to get an overview of the issues that are taken into consideration. The further aim is to understand the how the implementation of such standards can improve the accounting standard as a whole (Pierce et al., 2014). The report will finally evaluate the agreed and the disagreed comments of the various respondents and thereby a conclusion can be attained that whether the standard is ideal or not. Proposal The paper takes into consideration a current proposed improvement in the accounting standard so that the intentions of the non-employee shared based payment accounting can be improved. It is seen that developments in the non-employee share based payment accounting is important so that the sentiments of the non-employees in an organization can be maintained and the organizations can operate in the business properly (www.fasb.org/cs 2017). A good relationship between the employees and the organization creates a proper operating environment and therefore improvement in such payment accounting system is important. The standard has recommended various ideas and encourages all the organizations from various industries to take part in the commenting process the feedback can be gained. The changes are laid down in the form questions by the FASB and it is the job of the organizations to answer these questions by being in favour or in disagreement to the questions (Ng Gilbert 2016). There are various questions that have been laid down and all these are not mandatory to be answered. The organizations answer to only those questions that are in relation to their business and therefore, it is seen that exact answer related to the use of these standards can be obtained from different industrial sector (Board 2014). The questions talk about the tax benefits and deficiencies, complexity and cost while maintaining the information that are available in the financial statements, what should be the relationship between the cash flow and additional tax benefits be classified as, permission for the entities to undertake accounting policies election, proposed expansion of the business, tax payment process etc. The feedback of these answers will determine that the changes that have recommended can be useful to the economy or not. Debate So Far It was discussed earlier in the paper that answers from four respondents will be taken in order to understand the agreement or the disagreement of the changes that are recommended in the accounting standards (Liu et al., 2014). The answers given out by the first respondent is discussed as follows: Heiskell and MacGillivray and Associates This is an accounting and an auditing firm that operates in Australia and they provide answers to the questions that are related to the new and improved accounting standards. They agree to the elimination of the PIC pool of accounting and thereby minimize the level of cost and complexity in the process of such accounting. The firm even agrees to they feel that the associated expense for the compensation is even included in the income statement and therefore the tax deficits and the benefits are equally important to be implemented. The firm even agrees that there should be minimum delays for the identification of the surplus tax benefits (King 2013). In relation to the third question that is related to the classification of the tax cash flows within the operating activity, the firm agrees to it saying that such actions requires to be called an operational activity. It is seen that Heiskell and MacGillivray and Associates agree and say yes to the all the questions that has been laid do wn by FASB revealing that they are happy with the changes that have been proposed with respect to the non-employee share based accounting payments. Raytheon Company Raytheon is a company that is an innovative and technological leader who are known for their defence technologies, security tools and civil market software throughout the world. It is an US based organization that looks to build strong corporate governance. The organizations answer only the questions 2, 3 and 5 that are available in the exposure draft. It is seen that this firm disagrees with Heiskell and MacGillivary and Associates with the second question and disagrees with the proposed approach that the standard had recommended with respect to the identification of the additional tax benefits and the tax deficiencies within the income statement (Silny Schiller 2015). However, they believe that FASB should pursue a model where all the deficits and benefits of the excess tax are shown in the equity. They suggest the use of Symmetrical Equity Approach that will provide much better results with respect to the Board recommended approach. The organization with respect to question 3 agrees with the suggestion given out by the FASB and suggests that tax related cash flows should be considered as an operating activity (Bruesewitz et al., 2014). The organization even agrees to the suggestions that have been laid down in the fifth question in the exposure draft and claims that they permit the withholding the amount up to the highest marginal rate of tax that is applicable. American Bankers Association The American Bankers Association is an association where participants of all the banks that operate in USA are present and they look forward to improve the banking system and the operational activities of a bank. The Association appreciates the changes that have been proposed by FASB with respect to the improvements in the Employee Share-Based Payment Accounting and thus looks to answer the questions that have been laid down in the exposure draft. It is seen that the association answers all the questions and disagrees to one question (American Bankers Association American Bankers Association 2013). The Association opposes the identification of the excess tax benefits and the deficiencies to be income statement directly. The Association explains clearly that the identification of the additional taxes on the income statement would create a difference in financial report and the compensation expenses. Visa Inc The company is a global leader in the online payments technology and tries to improve the payment all over the world. The company even appreciates the opportunity to provide suggestions on the improvements proposed by FASB. It is seen that the company answers almost all the questions in the exposure draft and it is seen that they agree to all the propositions that have been stated by the Board but disagree with the suggestion of the additional tax benefits and deficiencies to be recognised in the income statement (Lee et al., 2014). They believe the proposal of FASB may reduce complexities for certain companies, but may raise the volatility of expenses related to the income tax. Importance of the Proposal The importance of the proposal reveals that these improvements are necessary with respect to the employee share-based payment accounting so that the compensation over the stock can be improved (Ranco et al., 2015). The proposal has been intended to improve the preparation of the financial report and lowering of the work pressure of the accountants and even making the cash paid by the employer for the shares will be helpful for the tax holding purposes of the employees. Conclusion The analysis of the proposals provided by the FASB with respect to the employee share-based payment accounting shows that leaving one of the four respondents that is Weiskell and MacGillivray Association, the others feel that changes in the proposal with respect to the recognition of the additional tax benefits and deficiencies in the income statement. The other proposals are agreed upon by all the respondents but this proposal is neglected as it may create volatility of the expenditures within the income statement. Therefore, it can be said that improvement in this segment will improve the scenario of the improvements related to the employee stock-based payment accounting. Reference List American Bankers Association, American Bankers Association. (2013, July). Feb. 2012. Web. Appelbaum, E., Batt, R., Clark, I. (2013). 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