The American Institute of Chartered Accountants has presented its budget
and finances at its Spring Council meeting in Washington, DC on Monday,
while the organization undergoes a transformation in international
partnership with the Chartered Institute of Management Accountants.
Eric
Hansen, Chairman of the Audit and Finance Committee of AICPA, provided a
summary of the finances in the last five months of the organization's
fiscal year, which now has a calendar year end, according to CIMA. For
the five-month period to December 31, 2016, the AICPA had a net loss of $
2.6 million, or $ 2.5 million of unfavorable budget. The variation is
due to several factors, Hansen said. Net operating revenues decreased by
$ 1.3 million above the budget, mainly related to the assumptions for
the budget for the five-month period, making most of the amounts
expected to be realized in 2017. Expenditure Of total operations was
negative by 1.6 million budget. The main factor that contributed was the
cost invested in consolidating the new Association of Professional
Accountants between AICPA and CIMA.
Two important non-operating
elements had an impact on the financial statements during the period.
First, a 5 million impairment charge was recorded after the management
of AICPA assessed several previous software projects and has been
determined to actually replace or translate "non-current." This decrease
charge was offset by a pension gain of $ 5.5 million related to an
increase in the plan discount rate due to current market conditions. On a
combined basis, net assets were reduced by 2.6 million, mainly because
of these differences. Last month, the AICPA Board of Directors
unanimously approved the audited financial statements, which included an
unchanged opinion.
AICPA Vice President of Finance Tim LaSpaluto
said that AICPA's investment portfolio performance has increased since
2012 and that the Institute continues to oversee its mix of portfolio.
The pension plans of the AICPA and CIMA are liabilities of each
respective organization.
For the calendar year 2017, the AICPA
will finance the new partnership as a whole. "As reported in the last
board meetings, we have provided a net shortfall of $ 10 million due to
the association's investment in strategic value generators," Hansen
said. "We expect continued growth in our revenue generation activities
and we expect growth of 5% compared to 2016."
One of the
highlights of the AICPA hopes that 2017 will be a new event in June
called Engage, which will feature the most important innovative,
influential and profession leaders. Tax revenue is expected to increase
by 5 percent, mainly due to the continued growth of membership in all
areas and rates to raise the rate based on previous years and inflation.
The AICPA is expected to drop 10% of test sales after last month's
release of the next generation CPA exam. However, the AICPA has
increased the number of candidates who examined the four quarters prior
to the change. The new uniform CPA exam puts more emphasis on cognitive
tests of higher order candidate skills, such as critical thinking and
analytical skills.
From the point of view of expenditure, the
AICPA anticipates increases in its operating expenses due to the annual
salary increases, which are indicated as being in line with the market.
The budget also includes a contingency of $ 1.75 million, in line with
previous years, to allow management and the board to deploy the
unbudgeted necessary resources.
Membership continues to grow. "We
expect to finish 2017 with more than 670,000 members and students, an
increase of 10,000 compared to 2016," said LaSpaluto. "Our cash and
credit section has increased by 10 percent, 100-76 thousand, which
includes newly accredited ratings for entities' certificates and
intangible assets, and we continue to generate revenue in all areas,
allowing us to invest In programs and initiatives that support our
members around the world.
This year, the AICPA launched the new
CeIV grade, which should generate additional income. The AICPA also
launched a tax reform in the Resource Center to informtion
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