Financial Reporting

Implementation Guide for GASB Statement 44 Offers New “Specialty” Guidance

The Governmental Accounting Standard Board (GASB), last week introduced the Guide to Implementation of GASB Statement 44 on the Statistical Section. The Guide, developed to assist preparers and auditors implementing the expanded statistical section of state and local government’s comprehensive annual financial report (CAFR), contains 120 questions and answers relevant to important aspects of Statement 44.“Statement 44 revises the statistical section for the first time in twenty-five years, so governments have been seeking help in adopting the new guidelines,” says GASB project

Jan 4 2006

623

A&A

CPA Firms Brace for SOX 404 Small Biz Exemption

Exempting smaller publicly-traded companies from the onerous 404 section of the Sarbanes Oxley (SOX) accounting reform law, -- a prospect being pondered by the Securities and Exchange Commission (SEC) –may cause some CPA firms to reposition resources.Charles Jones, a partner with Marshall Jones & Co. CPA firm in Atlanta and operator of a 404 boutique practice, says that group is already planning to shift its focus from 404 compliance to helping smaller companies with their internal audits.

Jan 2 2006

196

Technology

SEC Hails XBRL in Meeting With Microsoft, Oracle and Other Vendors

The Securities & Exchange Commission has expanded its support of XBRL, the software language that allows for instantaneous retrieval of detailed information within business reports, by telling a select group of software developers that it supports the technology’s expanded use in new generations of business software.

Dec 27 2005

145

European Parliament Passes New Accounting Rules

The European Parliament has passed strengthened accounting rules to increase transparency and to avoid some of the pitfalls of the Enron and Parmalat scandals. The Financial Times reports that companies in the European Union will have to disclose off-balance sheet arrangements and their financial impacts. Listed EU companies will be required to publish annual corporate governance statements, as well.

Dec 19 2005

113

Tax

Accountants and the Art World: From Supporting Artists to Recording Assets

Frances Dittmer, who built an art collection at the now bankrupt Refco, Inc., a company her ex-husband Thomas Dittmer founded, said she thought that “as long as we have to put something on the wall, it might as well be good art,” the Chicago Tribune reports.

Dec 18 2005

483

A&A

Going Into Effect December 15, 2005

More than 10 Statements, Issues and other guidance issued by the Financial Accounting Standards Board (FASB) go into effect on Thursday, December 15, 2005. Here is a brief list of those items going into effect.

Dec 14 2005

551

SEC Eases Revenue Accounting Rule for Vaccine Makers

The Securities and Exchange Commission (SEC), on Monday, announced a change in accounting guidance for pharmaceutical companies supplying vaccines to the Pediatric Vaccine Stockpile or the Strategic National Stockpile. Under the new guidance, vaccine manufacturers can recognize revenue upon delivery to government stockpiles rather than delaying revenue recognition until the vaccine is distributed.

Dec 8 2005

321

Challenges of Section 404 Compliance

Compliance with Section 404 of the Sarbanes-Oxley Act (SOX) is required in 2006. A report by the Public Company Accounting Oversight Board (PCAOB) states that both accounting firms and the public companies they audit will face “enormous challenges” this year as reported in CFO.com. This section of SOX requires that companies document their internal controls. “It is clear to us that the internal control assessment and audit process has the potential to significantly improve the quality and reliability of financial reporting.

Dec 6 2005

375

Tax

Corporate Fraud Still Widespread, Difficult to Detect

The number of companies around the world that reported incidents of fraud increased 22 percent in the last two years, according to a new Big Four survey.While layers of new controls have been implemented to improve corporate governance, fraud is still widespread, difficult to prevent, and detected many times by chance, according to the biennial survey by PricewaterhouseCoopers (PWC), which interviewed more than 3,000 corporate officers in 34 countries.Fraud was detected by 45 percent of the companies polled, which is up from 37 percent in 2003, Reuters reported.

Dec 5 2005

852

Practice Management

Governance & Accounting Still Concern Investors

Things have improved but there is still cause for concern. That is the message investors and creditors seem to be sending in a special report published Monday by Standard and Poor’s.“Governance and accounting remain heightened areas of concern for investors and creditors, and it remains critically important for them to assess the often qualitative, intangible, and principle-based dimensions of governance and accounting,” said George Dallas, managing director and global practice leader, corporate governance, Standard and Poor’s in a prepared statement.

Nov 30 2005

103

A&A

FASB to Review Proposed Fair Value Reporting of GICs

The Financial Accounting Standards Board (FASB) will meet Tuesday to consider the proposed FASB Staff Position (FSP) Reporting of Fully Benefit-Responsive Investment contracts Held by Certain Investment Companies Subject to the AICPA Investment Guide, issued on August 15th.

Nov 30 2005

400

A&A

Stock Option Expensing Coming in 2006

American companies with fiscal years ending December 31, 2005 will start expensing their stock options in 2006. This newly required reporting is expected to drop company net income figures noticeably. The Financial Accounting Standards Board (FASB) has been working to require American public companies to account for the impact of stock options in their financial statements since 1993, according to Business Journalism.

Nov 29 2005

352

Freddie Mac to Revise Income Downward for First Half of 2005

The mortgage finance company Freddie Mac said Tuesday that it will lower first and second quarter income by $220 million because of a computer error. Total profit for the period will be adjusted to $1.4 billion from $1.6 billion.

Nov 11 2005

161

Technology

Accounting for Campaigns

Political campaigns, whether they are for the local school board or the Senate, are run on money as much as on issues. And all that money must be accounted for. Candidates, election officials and the public have a right to know how much money was raised from whom and how it was spent. Two software applications, DirectFile and CompleteCampaigns makes the job of campaign accounting and financial reporting easier.Calling itself “the most advanced political accounting software available today”, DirectFile was created in 1995 for campaign treasurers in California.

Nov 4 2005

1089

Community News

Mark Your Calendar: Conference on Current Financial Reporting Issues

Financial Executive International’s Conference on Current Financial Reporting Issues (CFRI) is scheduled for November 17 and 18 at the Hilton New York Hotel in New York. The conference, promoted as “the must-attend event for preparers of corporate financial statements”, will include updates from regulators on accounting standards, reporting requirements and projects being developed.Featured speakers at the conference include:Donald Nicolaisen, Chief Accountant, U.S.

Nov 2 2005

95

Tax

Berkshire Hathaway Wins Three-Year Tax Case

Warren Buffett’s Berkshire Hathaway will receive $23.1 million plus interest after a Federal District Court judge ordered the Internal Revenue Service (IRS) to pay the company ending three years of litigation. Reuters reports the case stems from the 1989, 1990, and 1991 purchases of dividend-paying stocks with the proceeds of portions of $750 million which the company said it borrowed to strengthen its finances. The tax rule cited by the IRS in prosecuting the company governs the purchase of stock with borrowed money and any deductions resulting from the purchases.

Oct 31 2005

253

Investors See SOX Regulations Lacking

A new poll Wall Street Journal Online / Harris Interactive Personal Finance Poll shows that 55 percent of the participating adult investors believe the current financial and accounting regulations governing publicly held companies are too soft. Harris Interactive reports that for male investors aged 45 to 54, this number rose to 77 percent.

Oct 27 2005

187

Circular Logic: Making Sense of Circular 230 Changes

Tax practice for CPAs is changing. Recent modifications to Circular 230, the U.S. Treasury Department regulations that govern practice before the IRS, have established several changes that leave CPAs with a new standard for the practice of taxation. The rationale for the revised regulations is part of an IRS effort to promote ethical tax practices and curb abusive tax avoidance programs promoted by some tax professionals. Some CPA and law firms were coming up with tax-motivated transactions for clients and then packaging those transactions to sell to other companies.

Oct 25 2005

153

Community News

Measuring Non-Profit Performance -- Self-Review & Charity Monitors

Member charities of the United Way of the Coastal Empire (Georgia) are receiving visits from volunteer internal inspectors during their fall campaigns, savannahnow.com reports. Denise Oberlin, an inspector, accompanied Patti Lyons on a food delivery for Senior Citizen’s Inc. and was told that three out of four of the people served by the Agency were below the poverty level. Lyons also told Ms.

Oct 21 2005

529

A&A

New Tools Solve Complicated Requirements for Funds & Individual Investors

GainsKeeper®, part of Wolters Kluwer Corporate & Financial Services division, addes new tax reporting tools to its three industry-leading tax lot accounting suites – GKAdvisor™ used by funds, GKBrokerage™ for shareholders, and FundTax™ used by individual investors – in September.“Our tax lot accounting suites offer an automated solution designed to calculate key fund and investor figures, allowing both professionals and individual investors to spend significantly less time compiling and attempting to make calculations based on tax- relevant date,” Sanjeev Doss, GainsKeeper di

Oct 10 2005

204

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