A&A news

Tax

Janus Finalizes $226M Settlement on Fraud Charges

The Securities and Exchange Commission (SEC) announced on Wednesday a settled enforcement action against Janus Capital Management LLC (JCM), for entering into undisclosed market timing agreements with certain investors. The Commission ordered JCM to pay disgorgement of $50 million and civil penalties of $50 million, for a total payment of $100 million. JCM also consented to a cease-and-desist order and a censure, and agreed to undertake certain compliance and mutual-fund governance reforms.Stephen M.
A&A

Equity Wins Out Over Liability in FASB Debate Over Options

The Financial Accounting Standards Board (FASB) on Wednesday ruled out the possibility that stock-option pay could be treated as a liability.The decision ends the debate between the liability advocates and those who believe stock-option pay should be classified as equity.Wall Street analysts have argued that employee options are an economic liability because the actual cost to shareholders is the difference between the strike price of the options versus the higher stock price when the options are exercised, the Associated Press reported.
A&A

Price for Google IPO Set at $85 Per Share; Trading Starts Today

Google cut the value of its initial public offering by nearly half Wednesday, setting the price at $85 a share.With the Nasdaq symbl “GOOG.O,” the search engine giant will begin trading this morning.A tepid response by investors and a cool market for Internet stocks hurt Google, which cut its IPO price from its initial range of $108 to $135 per share. The final price was set through an unusual auction involving would-be investors.
A&A

Uniform Trust Code Sparks Privacy Concerns

State-by-state actions to adopt an updated, standardized set of trust rules are triggering fears of privacy violations.The Uniform Trust Code, or UTC, is designed to clarify sometimes-confusing trust laws, which differ from state to state, the Wall Street Journal reported. Legal observers said a national codification of the trust laws should simplify matters for trust creators, trustees and heirs.The UTC has already been approved in 10 jurisdictions.
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.

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