Submitted by Anthony Brunson, PA Certified Public Accountants & Business Advisors
As the new year begins, nonprofit organizations, governmental entities, employee benefit plans, and the businesses and individuals that support them throughout South Florida are navigating a shifting landscape of accounting standards, regulatory priorities, and tax planning considerations. Proactive awareness and early preparation can help minimize surprises, strengthen compliance, and create meaningful efficiencies in the months ahead.
Important Accounting Standards to Watch
Governmental Entities – GASB Updates
Governments should be particularly mindful of recently issued and newly effective GASB standards, including:
- GASB Statement No. 101, Compensated Absences– Now effective, this standard changes the recognition and measurement of compensated absences, focusing on leave that is attributable to services already rendered and more likely to be paid.
- GASB Statement No. 102, Certain Risk Disclosures– Effective for fiscal years beginning after June 15, 2024, this standard enhances note disclosures related to concentration risks and constraints, including revenue sources and exposure to events such as natural disasters—an important consideration for South Florida governments.
- GASB Statement No. 103, Financial Reporting Model Improvements– Effective for fiscal years beginning after June 15, 2025, this standard introduces significant changes to management’s discussion and analysis (MD&A), unusual or infrequent item reporting, and budgetary comparison information.
Early planning for implementation and disclosure changes can help avoid delays during audit fieldwork.
Nonprofit Organizations – FASB Developments
Nonprofits should continue monitoring FASB updates that may affect presentation and disclosures, including:
- ASU 2023-07, Segment Reporting (Topic 280)– Expands required disclosures about significant expenses and decision-making for entities with reportable segments, which may affect larger or more complex nonprofit organizations.
- ASU 2023-08, Accounting for and Disclosure of Crypto Assets– Relevant for organizations that accept or hold digital assets, requiring measurement at fair value with enhanced disclosures.
Employee Benefit Plans
Employee benefit plans continue to face heightened scrutiny and evolving requirements, including:
- Ongoing implementation considerations related to ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts, which may affect plans with insurance components.
- Operational and reporting implications of the SECURE 2.0 Act, including provisions impacting plan design, required minimum distributions, how certain employees may make catch-up contributions to their 401(k) plans, and employer responsibilities.
Audit Readiness and Internal Controls
Staffing changes, system upgrades, and increased reliance on third-party service providers remain common challenges. Clear documentation of accounting policies, timely reconciliations, and strong internal controls continue to be critical, particularly in an environment of increased regulatory and stakeholder expectations.
Business and Individual Tax Planning Considerations
The beginning of the year is also an important time to evaluate tax strategies for both businesses and individuals:
- Sunsetting of TCJA Provisions– Many provisions of the Tax Cuts and Jobs Act (TCJA), including individual tax rate reductions and the increased standard deduction, are scheduled to expire after 2025. Strategic planning in 2026 may help mitigate future tax exposure.
- State and Local Tax (SALT) Considerations– Ongoing limitations on SALT deductions continue to affect South Florida taxpayers, making entity structure and estimated tax planning especially important.
- Nonprofit and Governmental Tax Compliance– Organizations should remain attentive to payroll tax compliance, unrelated business income (UBI), and information return filings, including compliance with new Form 990 requirements.
- Individual Planning– Charitable giving strategies, retirement contributions, and timing of income and deductions remain key planning tools for individuals, particularly those involved in nonprofit governance or benefit plan administration.
Looking Ahead
Organizations that take a proactive approach, engaging early with auditors and tax advisors, assessing new standards, and planning for both compliance and strategy, are better positioned to navigate the year ahead with confidence.
Early Engagement: Don’t wait; understand upcoming changes now.
Technology Leverage: Use modern software for tracking and reporting.
Professional Guidance: Consult with CPAs, attorneys, and consultants specializing in these areas.
Internal Training: Educate staff and board members on new pronouncements and changes.
We look forward to continuing to serve nonprofits, governmental entities, employee benefit plans, businesses, and individuals throughout South Florida with thoughtful guidance and responsive support in the year ahead.
