liquor control

November 25, 2025 update: On November 25, 2025, the FDIC finalized its regulatory threshold updates rule. As mentioned in an FDIC press release, “the changes set forth in the final rule provide a more durable framework preserving certain regulatory thresholds in real terms, thereby avoiding unintended and undesirable consequences.” Although effective January 1, 2026, the final rule provides immediate burden relief to insured depository institutions that are currently subject to part 363 requirements but will no longer be subject to such requirements under the updated thresholds in effect as of January 1, 2026.

Originally published on August 29, 2025

The FDIC has proposed raising several key regulatory thresholds, including those that determine which institutions must comply with Part 363’s audit and internal control requirements. The primary driver behind these proposed changes is the growth experienced by institutions since the original thresholds were set decades ago. Due to inflation, the proposal aims to cover a similar number of institutions as when the thresholds were originally set. For example, the proposed increase to $5 billion for the Internal Control over Financial Reporting (ICFR) threshold, as described below, would still cover approximately 75% of institutions today.  

In addition to increasing these thresholds, the proposal also recommends that the thresholds be automatically adjusted based on some inflationary factors going forward. While the changes are designed to ease compliance burdens for smaller institutions, they also come with a cautionary tale—they would reduce regulatory requirements, but not the risk. 

What the FDIC proposal means 

Under the proposal: 

• Approximately 800 institutions may find themselves newly exempt from Part 363 compliance due to changes in 24 regulatory asset thresholds. The following items are the most likely to be relevant for community banks:

  • Banks under $1 billion in total assets would no longer be required to: 

    • Create a separate audit committee as part of the institution’s board of directors

    • File annual reports 

  • Banks under $5 billion would no longer need to: 

    • Include management assessments or auditor attestations on ICFR 

    • Require the audit committee directors to be independent from management 

    • Require the audit committee directors to include members with banking or related financial management expertise, have access to its own outside counsel, or exclude large customers of the institution 

  • Audit committee independence criteria would increase from $100,000 to a $120,000 compensation threshold. This threshold would not be indexed against inflation as it is meant to align with the listing standards of national securities exchanges. 

• Parts 303, 335, 340, 347, and 380 would also have changes if this proposal is enacted: 

• Part 303 – de minimis thresholds: 

• Increased from $1,000 to $1,225 and from $2,500 to $3,500 for certain criminal offenses 

• Part 335 – Insider loan disclosures: 

• Raised the threshold from $5 million to $10 million 

• Parts 340 & 380 – Asset sales restrictions: 

• Raised the “substantial loss” threshold from $50,000 to $100,000, which could allow an increase in potential bidders who are eligible to purchase failed institution assets 

• Part 347 – International banking: 

• Raised limits for foreign underwriting and dealing from $60M to $120M and from $30M to $60M. This is less likely to have an impact unless you have foreign operations. 

Why ICFR still matters for community banks 

Even without a federal mandate, effective ICFR offers tangible benefits: 

1. Fraud prevention: Segregation of duties, account reconciliations, and control monitoring are critical to detecting and preventing fraud—especially in lean staffing environments. 

2. Operational efficiency and reducing material misstatements: ICFR can help identify process inefficiencies and reduce errors. It can also help with training, as processes tend to be more clearly documented when they are being tested on an ongoing basis. 

3. Regulatory confidence: Examiners still expect clear documentation of key controls and risk assessments—even if an ICFR opinion is no longer required. 

4. Merger and acquisition readiness: Strong internal controls enhance bank value in due diligence settings, especially in today’s consolidation-driven environment. 

5. Board-level accountability: Internal controls provide visibility into operational risk that supports informed governance and oversight. 

6. Preparing for the next threshold: Many hours have been spent getting your documentation ready for audits, including creating, updating, and monitoring your internal controls. Walking away from the effort already put forth would mean a significant amount of time and resources to re-establish your documentation and controls as you prepare for the next threshold. Keeping your current internal practices in place with annual updates and regular monitoring will help make that next transition as smooth as possible. 

What we recommend 

For banks that would be newly exempt under the FDIC’s proposed changes, we suggest a right-sized, risk-based approach: 

• Maintain documentation of your key accounting controls and processes, including reconciliations, journal entries, and credit loss provisioning. This documentation should be updated at least annually by control owners. 

• Conduct periodic walkthroughs of high-risk processes (e.g., wire transfers, loan approvals) to identify gaps, inefficiencies, and areas of documentation that need to be updated. 

• Leverage internal or outsourced testing of controls. The frequency of this testing will likely be dependent on your institution’s risk assessment of each operational area. 

• Educate your board on how ICFR practices support accountability, even without formal reporting requirements. 

• Create a compliance checklist related to threshold changes to stay up-to-date with compliance requirements going forward: 

• Indexing monitoring plan 

• Establish a process to track inflation-based threshold changes: 

• Every 2 years, or 

• More frequently if the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) rises above 8%. Thresholds will not be reduced in deflationary periods. 

• Assign responsibility for monitoring CPI-W and updating compliance scope 

• Governance and board oversight 

• Reassess audit committee composition and independence under new thresholds 

• Review director compensation against the $120,000 independence threshold 

• Document any changes to board and/or audit committee structure or oversight responsibilities 

• Audit planning adjustments 

• Revise audit scope and frequency based on updated regulatory requirements 

• Coordinate with external auditors to align expectations and engagement terms 

• Adjust risk assessments to reflect changes in compliance burden and oversight 

• Reporting and documentation 

• Ensure proper documentation of decisions not to file Section 19 applications due to new thresholds 

• Maintain records of threshold applicability reviews and indexing updates 

• Prepare for potential regulatory inquiries regarding compliance scope changes 

• Stakeholder communication 

• Brief the board on regulatory changes, compliance impacts, and audit committee implications 

• Provide training or guidance to relevant teams (e.g., HR, compliance, finance) 

Final thoughts 

We understand the burden of ICFR compliance—and for many small banks, the relief reduces their already heavy regulatory burden. However, a move to step away from a well-established control environment has the potential to create downstream issues you might not see until it’s too late. 

Strong internal controls are not just a box to check for regulators and auditors—they're a tool for protecting your institution, your people, and your reputation. Regulators, investors, and auditors still care about the strength of your bank’s control environment—whether or not it's required by regulation. 

Maintaining strong internal controls remains a best practice—and a strategic imperative. Both are essential to your bank’s resilience, integrity, and long-term success. 

Let’s talk 

If your bank is approaching a new threshold or deciding whether to scale back ICFR documentation, we’d love to help you build a right-sized internal control approach that matches your risk profile. Reach out to our team with questions. 

Liquidity is the lifeline of any nonprofit organization. Strong liquidity ensures uninterrupted programs, financial stability, and the flexibility to respond to unexpected challenges. This article shares practical steps to monitor and manage liquidity effectively, including setting clear policies, tracking cash flow, using key financial ratios, managing reserves, and leveraging technology. By following these best practices, organizations can maintain resilience, build trust with stakeholders, and stay focused on their mission—even during uncertain times. 

What is liquidity and why it matters 

Liquidity refers to your ability to pay the bills on time, every time. For nonprofits, strong liquidity means uninterrupted programs, happy staff, and the flexibility to handle unexpected challenges. Weak liquidity? That’s like running a marathon without water stations. It’s not pretty. 

Building a solid foundation 

Start with a clear liquidity policy. Define minimum and target levels. Many organizations aim for at least three months of operating expenses. Spell out who monitors compliance and what happens if thresholds aren’t met. A written policy avoids panic and promotes accountability. 

Next, keep an eye on cash flow. A rolling forecast is your financial weather report. Update it monthly—or weekly during uncertainty—to project inflows like grants and donations and outflows like payroll and rent. Comparing actual results to forecasts helps you spot gaps early and act before they become crises. 

Know your numbers 

Ratios tell the story. The current ratio (current assets divided by current liabilities) shows if you can cover short-term obligations; aim for above 1.0. The operating reserve ratio (unrestricted net assets divided by annual expenses) measures your ability to weather revenue shortfalls. Tracking these trends over time helps you plan. 

Operating reserves are your safety net. Target three to six months of expenses and keep funds accessible. Require board approval for use because rainy-day money shouldn’t fund sunny-day shopping. 

Stay on top of receivables and payables 

Stay up to date with accounts receivable billing and collections, and make sure to collect pledges promptly. Manage your accounts payable smartly. Work to align payments with cash inflows and negotiate terms when needed. These habits prevent liquidity bottlenecks and keep relationships strong. 

Understand restrictions and communicate 

Restricted funds aren’t for general expenses, so track them carefully to avoid compliance headaches. Review donor agreements regularly—because “oops” isn’t a strategy. And don’t keep liquidity conversations behind closed doors. Share updates with your board and key stakeholders. Transparency builds trust and can even spark extra support when times are tight. 

Use technology to your advantage 

Modern financial tools can automate forecasts, flag risks, and provide real-time dashboards. Cloud-based systems make oversight easier and reduce manual errors, giving leadership the data they need to make smart decisions. 

When liquidity gets tight 

Act fast: accelerate receivables, negotiate with vendors, cut discretionary spending, and explore bridge financing or emergency grants. Planning ahead beats scrambling later. 

Monitoring liquidity isn’t about fear; it’s about freedom. Freedom to seize opportunities, weather storms, and keep your mission strong. With these practices, your organization can stay resilient and focused on impact. 

BerryDunn can help 

Our nonprofit experts bring a clear understanding of nonprofit funding, in-depth knowledge of complex compliance requirements, and the industry-specific knowledge necessary for accurate, complete financial reporting. That knowledge informs our work—and enhances your performance by addressing your most important operational challenges. Our team applies industry best practices to help move your organization forward. We provide strategic, financial, and operational support tailored to your mission. Learn more about our team and services.  

The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-08 in November 2025 to address stakeholder concerns regarding the accounting for acquired financial assets under current US GAAP. This update specifically amends the guidance for purchased loans, aiming to improve comparability, consistency, and decision usefulness in financial reporting.

Key differences from current US GAAP  

Under existing US GAAP (Topic 326), acquired financial assets are classified as either:  

• Purchased Credit Deteriorated (PCD) assets: Accounted for using the “gross-up approach,” which recognizes an allowance for expected credit losses (ACL) at acquisition, offset by a gross-up adjustment to the purchase price.
• Non-PCD assets: Recognized at fair value with an ACL charged to credit loss expense, which is seen as double counting expected credit losses.  

ASU 2025-08 expands the use of the gross-up approach to a broader population of acquired loans, specifically “purchased seasoned loans.” These are defined as loans (excluding credit cards) acquired without significant credit deterioration and deemed “seasoned”—either obtained in a business combination or purchased at least 90 days after origination, provided the acquirer was not involved in the origination.  

This change eliminates much of the complexity and subjectivity in distinguishing between PCD and non-PCD assets and reduces the risk of double counting expected credit losses that are already reflected in fair value measurements determined at the time of acquiring the financial assets. 

Effective date for ASU 2025-08 

ASU 2025-08 is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is allowed.  

Transition methods 

The amendments must be applied prospectively to loans acquired on or after the initial application date. Early adoption is permitted for interim or annual reporting periods in which financial statements have not yet been issued or made available for issuance. If adopted in an interim period, the amendments should be applied as of the beginning of that interim period or the annual period that includes it.  

Rationale and benefits 

The FASB’s post-implementation review revealed that the dual approach for PCD and non-PCD assets under current US GAAP created unnecessary complexity, reduced comparability, and did not accurately reflect the economics of acquired financial assets. The gross-up approach, now expanded to purchased seasoned loans, better aligns accounting with the economic reality that the fair value of acquired assets already incorporates expected credit losses. This method:  

• Enhances comparability and consistency across entities.  
• Reduces complexity and subjectivity in acquisition accounting.  
• Minimizes the “double count” of expected credit losses, improving the usefulness of financial information for investors and other stakeholders.  
• Is expected to reduce costs and operational burdens associated with the previous model. 

Journal entry examples 

The following journal entries are meant to display the differences in accounting for acquired loans as a result of ASU 2025-08. Thus, this is a simplified example. Acquisition accounting, particularly for business combinations, tends to be much more complex. Stay tuned for additional resources on acquisition accounting. 

Before ASU 2025-08 (current US GAAP)  
 

A. Purchased Credit Deteriorated (PCD) loan (gross-up approach)  

At acquisition: 

• Record the loan at purchase price (fair value).  
• Recognize an ACL.  
• Increase the fair value by the ACL.   

Journal Entry: 

Dr. Loan Receivable                                          $1,000,000 
          Cr. Cash                                                                        $950,000 
          Cr. Allowance for Credit Losses                                    $  50,000 

(Assume purchase price is $950,000 and ACL is $50,000) 

B. Non-PCD loan (day-one expense approach)

At acquisition: 

• Record the loan at purchase price (fair value).  
• Recognize an ACL with a charge to credit loss expense.  

Journal Entry: 

Dr. Loan Receivable                                    $950,000 
Dr. Credit Loss Expense                              $  50,000 
             Cr. Cash                                                                      $950,000
             Cr. Allowance for Credit Losses                                  $  50,000 

(Here, the ACL is recognized as an expense, not as a gross-up to the loan balance.)   

After ASU 2025-08 (for purchased seasoned loans) 
 

All purchased seasoned loans (excluding credit cards) are accounted for using the gross-up approach, regardless of credit deterioration. 

At acquisition: 

• Record the loan at purchase price (fair value).  
• Recognize an ACL.  
• Increase the fair value by the ACL.    

Journal Entry: 

Dr. Loan Receivable                                           $1,000,000 
                 Cr. Cash                                                                  $950,000 
                 Cr. Allowance for Credit Losses                              $  50,000   

(Same as the PCD approach but now applied to a broader population of acquired loans.)  

Improvement in accounting for acquired loans

In summary, ASU 2025-08 represents a significant improvement in the accounting for acquired loans, providing more meaningful and decision-useful financial reporting while streamlining the application of credit loss standards. Although not seen as a cost-burdensome ASU to adopt, as most information needed to adopt the ASU should be readily available, the ASU does introduce a new concept, namely, purchased seasoned loans. Thus, those impacted by the ASU should start assessing its impact now, especially given early adoption may be seen as favorable since the ASU is expected to reduce complexity compared to current US GAAP.  

As always, your BerryDunn team is here to help. Learn more about our team and services, and reach out with questions on the ASU or acquisition accounting. 

On November 5, 2025, the US Supreme Court heard arguments in Learning Resources, Inc. v. Trump, a case that challenges President Trump’s authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). If the presidential power to impose tariffs is ruled unconstitutional, importers could qualify for duty refunds and must act fast. A decision is anticipated in late 2025 or early 2026. 

Background 

Under IEEPA, the President may act to address any unusual or extraordinary foreign threat that endangers national security, foreign policy, or the economy in the US. This authority applies only if the President declares a national emergency. Trump declared such an emergency on April 2, 2025, citing the trade deficit and illegal immigration. Since February 2025, the Administration has imposed significant tariffs under IEEPA, including: 

• 10% minimum tariff on most imports 
• 50% tariff on copper, steel, and aluminum 

• 20 – 40% tariffs on most goods from Brazil, India, Canada, Mexico, and China 

President Trump’s use of IEEPA to impose tariffs has raised constitutional concerns. Challengers to this authority argue that IEEPA does not authorize the imposition of tariffs and that only Congress may regulate foreign commerce. 

Key actions for importers 

If the Court finds the presidential power to impose tariffs unconstitutional, importers may be eligible for refunds of duties already paid. However, refund eligibility will depend on timely administrative actions. To prepare, importers should: 

1. Review import activity 
     Identify entries that were subject to IEEPA tariffs. 

2. File administrative protests
    Submit CBP Form 19 protests within 180 days of each entry’s liquidation. 

3. Prepare for possible litigation 
     If protests are denied, consider filing suit with the US Court of International Trade. 

How BerryDunn can help

Our dedicated audit, tax, and consulting professionals understand the impact of tariffs and can assist with developing strategies for refunds as they become available. Learn more about our team and services.  

Read this if you are a CEO, CFO, controller, or finance team leader in the manufacturing industry. 

In a time when operational efficiency and sustainability are more critical than ever, small- and medium-sized manufacturers (SMMs) face a unique challenge—how to modernize without breaking the bank. Fortunately, the US Department of Energy (DOE) offers a solution through its Industrial Assessment Centers (IACs) Program—an initiative that combines expert guidance with financial support to help manufacturers thrive. 

What are IACs? 

IACs are university-based teams that provide free, in-depth energy assessments to eligible manufacturers. These assessments are conducted by engineering faculty and students, typically over a one- or two-day site visit, and include: 

• Engineering measurements 

• Detailed process analysis 

• Specific recommendations with cost, performance, and payback estimates  

After the assessment, companies receive a report with recommendations from the assessment team. 

DOE energy-saving implementation grants 

The DOE’s IAC Implementation Grants Program (also known as the Industrial Training and Assessment Center Implementation Grant Program) offers up to $300,000 per qualified recommendation to help SMMs implement energy-saving projects. These grants cover up to 50% of implementation costs. 

Who qualifies for IAC services and grants? 

Manufacturers must meet eligibility criteria to receive IAC services and grants, including:  

• Annual revenue: Under $100 million 

• Energy bills: Annual energy bills between $100,000 and $3,500,000 

• Workforce: Fewer than 500 employees at the assessed plant site 

• Ownership: Must have majority domestic ownership and control  
   

BerryDunn can help uncover federal grant opportunities 

At BerryDunn, we help clients uncover opportunities that foster growth. The IAC Program is one such opportunity, especially for companies unfamiliar with federal energy initiatives. The program operates on a rolling basis with relevant deadlines outlined on its website. Whether you're looking to modernize operations or simply improve margins, this program offers a compelling path forward.  

BerryDunn’s team of manufacturing industry professionals offers clients access to global industry knowledge and tailored, practical solutions that address complex operational, investment, risk management, and compliance challenges. We work collaboratively with each client, engaging in close communication to understand current practices and build actionable strategies for short- and long-term success. Learn more about our services and team.