A&A news

A&A

FASB Addresses Merger Reserve Liability Funds

Under new rules proposed by the Financial Accounting Standards Board (FASB), companies would have to expense merger-related costs as they happen, rather than using one-time reserve funds, the Wall Street Journal reported.In some cases, companies that dip in later to improve their earnings picture have used the reserve funds improperly. Reserve liabilities are often set up at the time of merger and are used for expenses such as firing staff or closing the factories of the acquired company, the Journal reported.FASB, which writes U.S. accounting rules through the authority of the U.S.
A&A

New Faces in Bankruptcy Court: The Middle-Aged

Just when many baby boomers expected to be settling into their comfortable homes earned from a lifetime of hard work, they’re finding themselves in bankruptcy court instead.The reasons are numerous; the circumstances complicated. Bankruptcy attorneys are accustomed to helping young people who have overextended themselves with credit card debt and the expenses of starting a new home and family. The faces they see now, however, are lined with a history of hard work and the burden of caring for both their children and their parents.
A&A

Searching for Solutions to Employee Theft: Tips for Loss Prevention Policies

It goes without saying that all employers are concerned about employee theft. As a result, employers are constantly looking for tools to prevent their, or their employees', property from becoming the victim of "sticky fingers." One of the most common practices used by employers to combat workplace theft is to search employees' personal belongings. However, as will be discussed below, there are a host of legal considerations that employers must take into account before it embarks on employee searches.
A&A

CPA Candidates, Educators can get Access to Free Professional Literature

The Uniform CPA Examination consists of multiple-choice questions and condensed case studies called simulations. Within the simulations, candidates must do an online search of professional literature databases to answer questions. Here are some ways that candidates, students, educators, and schools can get access to helpful online resources. CPA exam candidates can get a free six-month subscription to professional literature used in the computerized CPA Examination. This online package includes AICPA Professional Standards, FASB Current Text, and FASB Original Pronouncements.
A&A

FASB Begins Final Draft of Stock Options Expensing Rule

Despite opposition, the Financial Accounting Standards Board is moving ahead with a rule that would require companies to book stock options as a business expense.The accounting rule-maker decided last week to begin the final draft of the rule, which was first proposed in March and sparked a deluge of response, the Wall Street Journal reported. Supporters, which include the Securities and Exchange Commission, say the rule would give a truer picture of the company’s finances.
A&A

Federal Pension Agency May Have Money Belonging to You

If you know someone who is retired from the airline, steel, transportation, machinery, retail trade, apparel and financial services industries and lives in New York, California, Texas, New Jersey or Pennsylvania, there's a possibility that pension money belonging to them is being held by the Pension Benefit Guaranty Corporation, Reuters reported.While most of the $75 million in unclaimed benefits due to 26,000 people the agency can't find comes from those industries and belongs to people living in the above states, the benefits aren't confined to these areas.
A&A

Thousands Fail First Level of the CFA Exam

Just 34 percent of the 35,000 financial industry professionals who took first section of the Chartered Financial Analyst exam this spring passed, which represents the highest failure rate since the test began in 1963, Dow Jones reported. The usual pass rate hovers around 52 percent for the first part.Known as one of the most difficult exams, the CFA is routinely failed by finance professors and Wall Street veterans, and is seen as a badge of honor by those who do pass, Dow Jones reported.
A&A

Franklin Advisers to Pay $50 Million; Undergo Compliance Reform

The Securities and Exchange Commission this week announced that Franklin Advisers, Inc., an investment adviser firm in the fourth largest mutual fund complex in the U.S., has agreed to pay $50 million dollars and undergo compliance reforms to settle charges that it allowed rapid in-and-out trading, known as market timing, in mutual funds it managed, contrary to fund prospectus language. Under the settlement, Franklin will pay $50 million, including disgorgement of $30 million and a civil penalty of $20 million.
A&A

IRS Issues Depreciation Regulations, Expanding Small Business Tax Deductions

This week the IRS and Treasury Department issued guidance relating to the election to deduct the cost of certain tangible property and computer software. The regulations reflect changes to the law made by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The proposed and temporary regulations issued this week generally permit small business taxpayers to elect to deduct up to $100,000 of the cost of qualifying property purchased and placed in service in a taxable year beginning after 2002 and before 2006.
A&A

Victims of ID Theft Applaud New Way to ‘Freeze’ Credit Reports

Bridget Thomas of Prairieville, Louisiana, lobbied for a way to block access to credit reports in her state after she was badly burned by identity theft that destroyed her credit status.A woman with the same name as Thomas, but a different middle initial, obtained her social security number and started spending.Lawmakers in Louisiana and a few other states, moved by stories like Thomas’, have instituted a privacy option called a security freeze.
A&A

Intuit Unveils New Offerings for Accounting, Tax Professionals

Intuit's Accountant Central and Professional Tax business units recently unveiled a lineup of planned offerings designed specifically for accounting and tax professionals.The lineup includes two new professional tax software offerings. One program is being designed especially for the needs of smaller sole proprietors. The second offering is being designed for the needs of practices focused on helping taxpayers get their refunds fast.
A&A

New Law Means Speedy Clearing of Checks

If you regularly write a big check a few days before the funds are actually available in your checking account, it’s time to rethink your check-writing habits.The Check Clearing for the 21st Century Act, which goes into effect Oct. 28, will allow checks to clear in hours instead of days because a substitute check can be accepted as legal.
A&A

The 10 Worst Credit Mistakes You Can Make

Used properly, credit cards offer significant safety and convenience benefits. But mistakes with credit can cost dearly -- in time and money and in terms of credit rating. To help consumers avoid costly credit card errors, the Texas Society of Certified Public Accountants highlights the most common credit card mistakes and explains how to avoid them.Mistake 1: Not shopping around for the best interest rate. Credit card rates and terms vary greatly. Financial publications and the Internet are good sources to find the best credit card options.
A&A

FASB's Plan Could Mean ‘Major Hit’ to Earnings

Update: 7-28-04 - second paragraph: Multinational corporations may be looking at a big increase in reported liabilities and a deep cut to profits if a change in deferred-tax accounting is adopted by the Financial Accounting Standards Board.The FASB staff is expected on Tuesday to recommend further study of the feasibility of requiring companies to book a liability for taxes payable on profits earned and held overseas, the Wall Street Journal reported. Increasing companies’ reserves for tax liabilities, which would be a result of the requirement, would chip away at earnings.
Tax

Give Your Financial Institution a Bonus; Bonus Depreciation Will be Lost December 2004

The opportunity to claim bonus depreciation will be lost as of 12/31/04. If they have not already done so, financial institutions should be scrambling to assure they take full advantage of this expiring provision. This tax law has been a true bonus for the banking industry helping fuel branch expansion. Even without the bonus depreciation legislation, the past five years have been extraordinarily friendly towards real estate expansion.
Practice

Ex-Directors of Bankrupt Companies Get Invites to Join Other Boards

Directing a company that filed for bankruptcy amid scandal is apparently not enough to keep former board members from leading other companies.Former directors of scandal-ridden companies such as Enron and WorldCom are in demand, Reuters reported.
A&A

The Value of Proactive Service in Your Accounting Firm

Clients want a proactive accountant. They want you using your expertise to look out for their interests and bring them benefits that they didn’t know to ask for. By being proactive, you show your initiative and you create added value.Reactive service gives you fewer opportunities to thrill clients. You have to wait until they ask for something. When you reach out, you not only have more control, you get more credit for taking the initiative. Proactive service thrills clients.For instance, at the new Park Hyatt Hotel in Japan, many staff members have two-way radios.
A&A

How Do Smaller Firms Compete?

By Bob Lewis Q: How can my two-person firm convince clients we can serve them?A: Have you ever heard of “spin?” Spin is how you position a situation. Is a half empty glass a positive or a negative? It depends how someone looks at it, and how the half glass is presented. As an example, at a restaurant, if you sat down and got a half glass of water, you would think it was odd (and not in a good, eccentric kind of way).
Technology

Microsoft Announces Massive $32 Billion Payout Plan

Microsoft has announced it would pay a $32 billion special dividend to its shareholders, while buying back $30 billion of its shares over the next four years and doubling its regular dividend payment. Pending approval by shareholders, the special dividend of $3 a share will be paid out on Dec. 2. The annual dividend will be increase to 32 cents a share, or about $3.5 billion a year.Observers say Thursday’s announcement is an answer to critics who believe the software giant is too conservative with its cash, the Business Standard reported.
A&A

Bill Would Expand Small Business Tax Break

Small businesses would receive a boost from legislation passed Wednesday by the U.S. House that would save small businesses $10.9 billion in taxes from 2006 through 2008, the Wall Street Journal reported. It is not clear how much support the measure has in the Senate.The House’s bill would extend a small business tax break that allows them to immediately write off up to $100,000 in capital purchases as a business expense.

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