Thursday, December 29, 2011
SEC Had Accounting Questions for Groupon
Recently disclosed letters
between the Securities and Exchange Commission (SEC) and Groupon show there was some concern about the companies accounting practices. The letters were sent in the summer and fall of this year prior to the companies IPO in November.
The company moved online marketing from its operating expenses. Since they are recurring and normal this is a violation of GAAP. The company also was questioned about their rosy outlook for growth and profitability. Groupon has been one of the IPO disappointments of 2011.
Labels: GAAP, Groupon, SEC
Tuesday, December 27, 2011
Tax Laws Expiring
Even though the payroll tax was extended for another two months there are still a large number of laws that will expire at the end of the year. The expiring laws will affect both individuals and businesses.
Businesses will no longer be able to claim 100% bonus depreciation for the first-year. The research and development credit and the work opportunity credit will also end at the stroke of midnight on December 31st. Some other less widely used credits that expire include the plug-in electric and conversions, biodiesel and renewable diesel, alternative fuel and alternative fuel mixture, Indian employment, and railroad track maintenance. But for those who are sick of all the credits for green energy there is also a credit for mine rescue team training and refined coal production facility.
Individuals also need to remember there are a few changes for them also. The biggest is expiration of the alternative minimum tax (AMT) patch. The AMT will revert to $45,000 for married individuals and $33,750 for unmarried individuals. Nonrefundable credits can't be used to offset the AMT.except in limited number of exceptions. Other expiring credits include: adoption and adoption assistance, school teacher expenses, mortgage insurance premiums and the energy property credit.
This is just an overview of some of the changes to the federal tax code. There are also state and local tax changes that may affect your tax return. You can contact your tax accountant
for information specific to your return.
Labels: tax changes
Thursday, December 22, 2011
IRS Issues Tax Guide
The IRS has issued its yearly Publication 17
. This is a basic tax-filing information. It contains details on what deductions and credits are available to tax payers. Publication has been issued every year since 1940. This years edition is 303 pages.
Labels: IRS, Publication 17
Friday, December 16, 2011
Mobile Accounting Resources
If you use the Accountants Resource Network (ARNE) from Thomson Reuters and are on the go then there is some good news. There are now Android and iPhone apps
that let you access the information. ARNE has information on product, firm, and accounts. It also offers forums, blogs and articles.
Thursday, December 15, 2011
Is it Time for a Repatriation Tax Holiday?
The Win America Campaign is lobbying to get a repatriation tax holiday. This would provide a window for US Corporations to repatriate earnings from foreign subsidiaries. In effect they will pay a tax rate or 5.25% instead of the standard rate of 35%. The group says that $1 trillion is "trapped" overseas. They say that if the money was repatriated then the companies would use the money to invest in the US and create new jobs.
One opponent of the plan is Senator Carl Levin. He argues that those companies are already using the US banking system and are investing in US treasuries. In essence they already have the benefit of the strength and stability of the US financial system.
A second argument he brings up is the previous time the US had a tax holiday. That was back in 2004. When 15 companies were surveyed about what they did with the repatriated funds none could point to investing in US companies, hiring employees, or conducting new research and development. All 15 payed back shareholders and paid bonuses to executives.
A logical solution is to only provide the tax holiday for the funds that are re-invested in the US. The problem is that this would be very difficult to track. Money is very fungible for a large multi-national corporation.
Labels: foreign profits, repatriation, tax holiday
Tuesday, December 13, 2011
FASB Extends Comment Period
The Financial Accounting Standards Board (FASB) is extending the comment period
on three current standards proposals. The three proposals cover investment companies, investment properties, and consolidations. The extension is at the request of of several industry groups. They said they were unable to submit comments because of the load from end of year closings. So to help them out the comments can be submitted until February 15, 2012. The original date was January 17, 2012.
Thursday, December 8, 2011
States Voice Concern over FASB Proposal
The FASB is proposing would require five year cash-flow projections to receive a clean audit. Several state treasurers have some reservations about the proposal at the National Association of State Treasurers conference this week. Their concern is that local municipalities would have a difficult time generating the projections. Most would need to hire outside actuaries to prepare the projections. In a time of great fiscal strain it is just one more expense. There is also concern among the treasurers about the accuracy of projecting out five years. That is much further than most municipalities now budget their cash-flow.
The projections are wanted by bond buyers. The use the information to price and evaluate municipal bonds.
The proposal is going to be tested by 50 governments. They are to report back how well it can be implemented. The feedback and the comments will be used to create a final proposal by FASB.
If you need help with cash-flow analysis and budgeting for you business we can help. Our business accountants
are experts in helping small businesses. We can manage everything from simple bookkeeping to acting as your CFO.
Labels: cash-flow, FASB
Wednesday, December 7, 2011
Standards Convergence is Not Working
At the AICPA National Conference this week, FASB Chair Leslie Seidman commented
that the convergence of national and international accounting standards is not working well. And it isn't just the Americans who think so. The chair of IASB, Hans Hoogervorst, spoke the to conference after Ms Seidman and had the same opinion.
They both want to work on the current priorities but in the long term that true convergence is not possible. Mr Hoogervost said that in the end the two boards sometimes come to different opinions on some accounting standards. He thought that continuing with the current model for convergence just wouldn't work.
The alternative to convergence is the inclusion of IFRS into US GAAP. This is dependent on the SEC and is at least few months away.
Labels: convergence, FASB, IASB
Friday, December 2, 2011
Europe Looks to Require Rotating Auditors
The European Commission proposed rules to require public companies to change their auditors every six years. It also requires audit firms to separate their auditing
and consulting functions.
This has a significant impact on not only European companies but US multinationals. It is even more significant for the biggest auditing firms of KPMG, Earnst & Young, KPMG, PricewarehouseCoopers, and Deloitte.
The goal is to improve competition in the audit market which has seen significant consolidation over the last three decades. It will also help to eliminate un-healthy relationships with companies and their auditors. The problem is that there are significant cost when bringing in a new auditor.
This is still just a proposal but something that is being considered in the US as well.
Labels: audit, auditing, auditor, Europe
Thursday, December 1, 2011
$153.3 Million Returned
The IRS has reported
that it could not deliver $153.3 million in refund checks due to address errors. The checks were returned by the postal service. That breaks down to 99,123 taxpayers owed an average of $1,547. This year the IRS sent out 199 million tax refunds for $358 billion.
To avoid mailing problems the best solution is to use direct deposit. Not only will the check avoid any mailing problems, it gets to you much faster, and it doesn't cost anymore. If you need any help setting this up just talk with your local accountant
Labels: irs announcement, tax preparation, tax refunds