Tony Billings published in CPA Journal

Mike Ilitch School of Business Professor of Accounting Tony Billings has had an article published in the CPA Journal, which is “internationally recognized as an outstanding, technical-refereed publication for accounting practitioners, educators and other financial professionals all over the globe.”

The article, “How ASU 2016-16 Changed the Treatment of Intra-Group Asset Transfers,” was co-authored by Melvin Houston, J.D.


In October 2016, FASB issued Accounting Standards Update (ASU) 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, amending Accounting Standards Codification (ASC) Topic 740. The new standard became effective for public businesses with fiscal years beginning after December 15, 2017, and for all other entities with fiscal years beginning after December 15, 2018. Among other objectives, the new standard seeks to simplify the reporting for intra-group transfers of assets other than inventory. One main consequence of ASU 2016-16 is that intra-group members selling assets are required to record a current tax expense or tax benefit upon asset transfers to other group members; similarly, recipients of the asset transfers are required to record a current tax expense or benefit as well as a deferred tax asset or liability. The new standard is also important for outbound transfers of assets to foreign affiliates. Overall, the new standard promises to have far-reaching effects for the financial reporting of consolidated groups, as it departs significantly from the concept of comprehensive accounting principles of the prior ASC 740.

This article reviews the changes made by ASU 2016-16 pertaining to intra-group asset transfers and provides several illustrations seeking to assist CPAs and other accounting professionals in applying the new standard for intra-group asset transfers. The article also discusses important new disclosure requirements that align ASU 2016-16 with International Financial Reporting Standards (IFRS).

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