New York, NY. October 31, 2008. At the AICPA/FMD co-sponsored National Conference on the Securities Industry, AICPA President and CEO, Barry Melancon, touched on fair value accounting standards, AICPA’s strong support of the independence of standard-setters and International Financial Reporting Standards (IFRS).

With recession as a backdrop, Melancon had a few words of advice for CPAs nationwide:

• Be ever-resilient; and
• Be pragmatic and put context around current issues when servicing mid-market industries.

Melancon predicted “regulatory reform will be a dominant issue in the new Congress.”

What else do the stars hold?

Fair Value Accounting — Melancon noted that a 90-day study of the bill is being conducted and that the U.S. Securities and Exchange Commission will release the results of that study on January 2, 2009, as it relates to today’s issues. He noted that fair value “can be improved” and that it needed the support of the international accounting standards setters.

Single Global Standards — With the interconnectivity of capital markets around the world, Melancon said it was “necessary for one single set of global standards.” He observed that besides the U.S., most countries around the world had already stepped up to the plate and converted to IFRS standards and it was time that the U.S. follow suit. To that extent, he suggested that the roadmap for IFRS adoption could take a little longer than originally envisioned due to the worldwide economic slowdown, “but the train has left the station.”

Tax — Under corporate tax, Melancon said he expected that the new government would review Codes 54 and 86. According to William Stromsem, Director of AICPA’s Tax Committee, “Code section 54 provides a credit for holders of clean renewable energy bonds and section 86 adds to gross income a portion of Social Security (and railroad retirement) benefits for those who earn over $25,000 for singles and $32,000 for a married couple filing jointly.” For tax practitioners, Melancon also sees changes on AMT (Alternative Minimum Tax). “The AMT currently affects many middle-income individuals. Given the desire to provide relief to middle-income taxpayers, the AMT has to be considered in any debate on tax reform,” said Melancon. “However, we have to remember that any change to the AMT will have a huge impact on federal revenues,” he added.

Sukanya Mitra is Managing Editor of the Insider™ e-newsletter group.