Bramwell’s Lunch Beat: IFRS Filing Option Has ‘Little Support,’ SEC Official Saysby
Toshiba withdraws forecasts, cancels dividend on accounting probe
Toshiba Corp. withdrew its earnings forecasts for last year and won’t pay a year-end dividend after finding improper accounting on infrastructure projects, wrote Pavel Alpeyev and Takashi Amano of Bloomberg. A third-party committee is also being formed to further investigate the matter, the Tokyo-based company said on Friday. The company had projected net income of 120 billion yen ($1 billion) on sales of 6.7 trillion yen in the year ended March. Toshiba also said it may have to revise earnings from fiscal year 2013 and earlier. A Toshiba spokeswoman said the company understated costs on several construction projects, including power systems, social infrastructure, and community solutions units.
Key SEC official cools to IFRS filing idea
The chief accountant at the US Securities and Exchange Commission (SEC) is distancing himself from the idea he floated late last year that perhaps the SEC should allow US public companies an option to report under IFRS, wrote Tammy Whitehouse of Compliance Week. At a one-day conference in New York, James Schnurr said staff outreach in recent months revealed “virtually no support” to have the SEC mandate the use of IFRS for all registrations, and “little support” for domestic companies to prepare financial statements under IFRS. Staff has reached out to preparers, investors, auditors, regulators, and standard-setters, he said. However, Schnurr added “there is continued support for the objective of a single set of high-quality, globally accepted accounting standards.” His goal is to deliver a recommendation to SEC Chair Mary Jo White “in the near term,” although he did not elaborate any further on what he plans to recommend.
Top Dem sees tough road ahead for tax reform package
The top Democrat on the House Ways and Means Committee conceded on Thursday that reaching consensus on a tax reform package this summer will be difficult at best, wrote Vicki Needham of The Hill. Rep. Sandy Levin (D-MI) said there are “major issues” standing in the way of what he argued must be a bipartisan agreement on overhauling the nation’s tax framework. But lawmakers have yet to sit down and start hammering out a plan on the tax front, with trade dominating the agenda for the House Ways and Means Committee so far this year, Levin said during a Christian Science Monitor breakfast in Washington. They have yet to address a tax extenders bill, as well. Levin said it is too soon to tell what is going to happen on that front. Last week, House Ways and Means Committee Chairman Paul Ryan (R-WI) said he still hopes this summer to take the first step on what he views as a two-year process to complete tax reform legislation.
Durbin warns agriculture firm on tax deal
Sen. Dick Durbin (D-IL) is warning a major US agriculture company to think twice about moving its legal address offshore, wrote Bernie Becker of The Hill. Monsanto Co. has approached Syngenta AG, a Swiss competitor, about a merger that would create a giant among the agriculture industry, according to media reports. That sort of move would also allow Monsanto, which is currently based in St. Louis, to shift its headquarters abroad, slashing its tax bill in the process. Durbin and other Democrats have vocally protested those deals, which are known as corporate inversions. “You and your board must recognize that your company’s continued commitment to America would be good, not only for the country, but also for Monsanto Co.’s bottom line,” Durbin said.
[UPDATE: According to a Bloombergarticle, Syngenta rejected a 41.7 billion Swiss-franc ($45 billion) takeover offer from Monsanto on Friday, saying it undervalued the company and a merger would have significant execution risks.]
Americans living abroad set record for giving up citizenship
More Americans living outside the United States gave up their citizenship in the first quarter of 2015 than ever before, according to data released on Thursday by the IRS, wrote Richard Rubin of Bloomberg. The 1,335 expatriations topped the previous record by 18 percent, according to data compiled by Bloomberg. Those Americans are driven to turn in their passports in part because of laws that have expanded bank reporting and tax compliance requirements for expatriates. The increase in early 2015 follows an annual record in 2014, when 3,415 Americans gave up their citizenship. An estimated 6 million US citizens are living abroad, and the United States is the only country within the Organization for Economic Cooperation and Development that taxes citizens wherever they reside. US citizens who live abroad can exclude as much as $100,800 in earned income and in many cases can receive tax credits for payments to foreign governments.
Deal takes shape for ‘mansion tax’ to move forward
New York City Mayor Bill de Blasio is calling for a new tax on the sale of houses, co-ops, and condominiums worth more than $1.75 million, part of a wider political deal that would extend tax breaks for developers and create another revenue source for city housing programs, wrote Josh Barbanel of the Wall Street Journal. The proposal was endorsed by the Real Estate Board of New York, an industry group long dominated by large developers. But for some rank-and-file real-estate brokers, however, the deal wasn’t necessarily welcome. They said the new “mansion tax” of up to 1.5 percent on top of existing transfer taxes paid by buyers and sellers could put the brakes on the city’s roaring residential property market. The city estimated the tax would affect 10 percent of all transactions. But a review of market-rate transactions found that 27.6 percent of all Manhattan deals would have required the payment of the new tax last year, including 68 percent of townhouse sales and 39.4 percent of condo transactions.
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