There are rules and regulations in accounting and finance that impact on the United States Postal Service (USPS). By law, the Postal Services are required to obtain a certification from an independent certified public accounting firm of the accuracy of different financial statements of the Postal Services that are used to determine and establish the postal rates. By law, the postal services are required to carry out activities that are authorized and contain estimates of the financial conditions for operations. The budget programs include a statement of financial conditions which is largely income and expense. Under section 8G (f) of the inspector General Act of 1978 and 3 the Postal Regulatory Commission requests to be appropriated out of the Postal Service Fund under section 504 (d).
Accounting Standards Updates Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting (a consensus of the Emerging Issues Task Force)
Update No. 2017-07 was released on March 10th, 2017. The update evaluates the Compensation and Retirement benefits by introducing Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs. The amendment mandates USPS to report on service and net benefit costs. The update section 715-30-45-4 mandates USPS to lists all service costs that are directly involved in retirement. The update section 715-60-35-9 requires USPS to provide health and retirement benefits based on the inventory returns that the company has registered. At USPS, the update mandates the Office of Personnel Management to be involved in the duty of providing health benefits premiums to different retirees.
Accounting Standards Updates Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)
The amendment in this update is meant to affect all business entities, private or public, and even the federal agencies. Under Topic 230, any entity that has restricted cash or its equivalent are supposed to include them in cash flows and present them for evaluation. The key idea in this update is that cash flows should be able to capture and account for all the cash transactions and changes that take place during an accounting period. However, the significant shortcoming in this update is that it fails to elaborate what is covered by the term restricted cash or restricted cash equivalent. There are also mentions of foreign currency, where it is stated that there must be a specified exchange rate before consideration in the cash flow. It should be noted that this factor aims to be an independent part of the of the change reconciliation. These are done to ensure there is no duplication and that the classification is done appropriately. It appears to be effective because the update has provided a good standard-setting criterion for disclosures at the FASB and how to administer the changes experienced. The amendments will be effective for business entities at the beginning of a fiscal year that will start on 25th December 2017. For other firms such as the agricultural sectors among others, the rule will start being effective after the exercise on 15th December 2019.
Revenue Recognition and Protection
Revenue recognition and protection is an important USPS consideration because it enshrines ethical business practices by considering roles, responsibilities, procedure and processes that ensure the smooth running of the USPS in the enterprise. They are meant to control the postal inspection services and the revenues protection to prevent massive losses and maintain the new opportunities in the business for higher improvement and development. Moreover, the trend in managing the USPS has been declining to lead to slow operations and financial performance by offering after-sale services. Revenue recognition and protection is recognized by investors because it helps them to determine the exact performance of the company. Revenue recognition is under guidance of the Generally Accepted Accounting Principles for International Financial Reporting Standards (IFRS). The objective of the new guideline is to ensure that information is easily accessed by all stakeholders in a routine and respectable manner. The guideline course of action allows
Provision of a robust framework for addressing revenue issues
Provision for useful information to users of financial statement and other disclosures.
Simplification and the preparation of financial statement for reducing exact number of requirements.
Creation of a competitive framework that allows institutions to disclose information.
http://www.fasb.org/jsp/FASB/Page/BridgePage&cid=1351027207987Section2: SOX News
Dodd-Frank isn't the only financial law Trump should change
The Sarbanes-Oxley (SOX) Act requires more changes and amendment to hold more business entities in the economy especially the banks that are the primary source of commercial borrowing. The current updates in SOX state that the business corporation must maintain its efficiency based on the internal controls that will be later used by an external auditor to examine the performance of the business and reduce fraudulent activities that might occur. The SOX amendment expects the top management to determine and disclose certain details regarding conflict of interest that emerge from the daily activities performed in the business.
http://thehill.com/blogs/pundits-blog/finance/317798-dodd-frank-isnt-the-only-financial-law-trump-should-changeRevenue Protection Rules
FASB update mandates OIG Audit for the selected activities, part of which oversees the proper keeping of accounting records. The OIG transactions are stated on the general ledger accounts and are kept in control in various other transactions. The OIG does not propose the different adjustments by allows close USPS to close examinations its financial statements to ensure that there is perfect coherence. This way, the USPS has been able to achieve the required course of actions which enshrines different ethical practices, roles, responsibilities and processes that oversee the smooth running of USPS. Hence, the chief role of the OIG Audit is to investigate whether the accounting transactions did meet FASB expectations.
https://www.uspsoig.gov/sites/default/files/document-library-files/2017/FT-AR-17-006.pdfSection 3: USPS News & Competition in the Industry Trend
United States Government Accountability Office. 2017. U.S. POSTAL SERVICE - Key Considerations for Restoring Fiscal Sustainability
FASB update 15-290 empowers the Government Accountability Office (GAO). The Update states that the Government Accountability Office 2017 seeks at restoring Fiscal Sustainability by ensuring that it is possible to maintain USPS financial performance by keeping the expenses growing. The resources show how fiscal sustainability was restored from an increase of 2.6 to 3.1 billion. These were some of the GAO objectives that saw USPS ensure that it was composed of sound strategies that would see it improves in income and performance. The GAO specifications also required USPS to develop a technological advancement model which would oversee USPS introducing e-mailing systems to deliver mail services. The systems will be used to improve payment to workers while ensuring that retirees receive their pension plans on-time. The GAO also requires USPS to respond to the changing financial conditions by ensuring that it manages salary and wages in a much superior way. As well, GAO requires USPS to increase efficiency by ensuring that all benefits plans are delivered on time.
How Reforms Could Turn U.S. Postal Service into Threat for UPS and FedEx - Trucks.com
According to Trucks.com, the reconstructed USPS could attain a whole new position and outclass its competitors such as FedEx and UPS. The objective of this article is to portray the possibility of USPS reforms and updates, leading to better performance thereby resulting to greater results in the industry. The reforms that USPS is taking prove to be a major threat to the private-owned entities. The industry of letter and parcel delivery has been without advancements for the longest time and this necessitates change. Although, the current state of USPS cannot be termed as healthy, its plan is bound to work once effected. The article also reveals that the updates are mostly related to the financial aspect of the organization. This means that the operations might stagnate soon as compared to its competitors whom at the moment, seem to be beneath it.
BCC Software: Postal Industry News
The resource indicates that the USPS has upgraded its analogue systems to digital allowing the handling of the mail services online. The new technologies have required USPS to have several automated machines which
The news updates show how USPS suffered a $200 million loss in the first quarter fiscal year. This was second suffering from $522 million which was the same development an year later. It is clear that USPS has been suffering from a declining revenue base. However, according to the news update, the positive shipping and packages have offset with the declining First-Class revenue to close $568 million in the first year. The update however illustrates that the profitability will only return if the organization continues to improve efficiency, by reducing costs and expanding the use of technology. This has been possible by evaluating the legislative and regulatory reforms that encourages the meeting of the Postal Services and mailing industry expectations.
SOX technology updates
The new update date March 1st, 2017 explains a survey by The SOX & Internal Control Professional Groups which are mandated to oversee internal control over financial reporting (ICFR) where the burden of financial reporting increases with the increasing activity rate. The news update analyzes a primary research where 31 percent of individuals working in the organization had over $5 billion market capitalization that represented close to the $700 million in market capitalization. The results shows that different organizations are pursuing technology as a way of increasing efficiency and productivity, as well complying to various SOX specifications.
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