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Accounting considerations for companies merging with SPACs

The Securities and Exchange Commission (SEC) recently reinforced its focus on the importance of corporate governance and financial reporting by special purpose acquisition companies (SPACs). Acting Chief Accountant Paul Munter issued a statement last week highlighting key financial reporting and auditing considerations for private companies entering public markets through a merger with a SPAC. On the same day, the staff of the Division of Corporation Finance issued a statement on issues to be considered before a private company undertakes a business combination with a SPAC. “SPACs have been used for decades as a vehicle for private companies to enter public markets but have recently become increasingly popular,” Munter said. As the use of SPACs continues to appeal to companies looking to go public, SEC scrutiny will likely increase. “Regardless of the form or structure used to access our markets, we are always keenly focused on protecting investors,” Munter advised.

The Tax Filing Deadline Was Delayed to May 17, but Read the Fine Print

Tax filing is a little more complicated this year. The deadline to file a 2020 individual federal return and pay any tax owed has been extended to May 17, about a month later than the typical April deadline. The Treasury Department and the Internal Revenue Service moved the date to give filers, tax preparers and the I.R.S. itself more time to adjust to disruptions from the coronavirus pandemic. Most states are following the extended federal deadlines, and a few have adopted even more generous extensions. But the I.R.S. has not postponed the deadline for making first-quarter 2021 estimated tax payments, as it did last year when it delayed Tax Day because of the pandemic. This year, the first estimated tax deadline remains April 15. Some members of Congress are pushing for the I.R.S. to reconcile the deadlines, but it’s unclear whether that will happen, with April 15 less than a week away.

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