Outsourcing loses its luster for US tech companies
Emily Chasan, senior editor of the Wall Street Journal’s CFO Journal, reported today that technology companies in the United States are putting the brakes on plans to move manufacturing or back-office operations to cheaper foreign markets, according to a BDO USA survey of CFOs released yesterday.
Only five out of 100 technology CFOs said they were planning to offshore services or manufacturing in the near future, the article stated, which is a sharp decrease from the 16 percent who said yes last year and 20 percent who agreed in 2012.
After a series of economic disruptions and environmental disasters in the past few years, CFOs are trying to look a little more holistically at outsourcing, according to Aftab Jamil, a partner at BDO who heads the technology and life sciences practice.
“They are saying do we really save enough money that it is worth that risk?” he said, according to the article.
Real estate companies ready to adopt new standards on interest rate swaps are being warned by some accountants: “Buyer, beware,” Gus Delaporte of the Commercial Observerwrote yesterday.
The Financial Accounting Standards Board (FASB) recently issued an update to US Generally Accepted Accounting Principles (GAAP) that simplified the hedge accounting approach and allows companies to assume no ineffectiveness of a hedge and measure the swap at settlement value. Not only does the standard streamline the accounting process, but it also improves cost effectiveness, Delaporte noted.
“Simplification is good. You don’t have to show the fair value of the swap, so you don’t have to pay an expert to get an assessment. It also saves on bookkeeping costs,” said Christopher Dubrowski, the director of professional practice, real estate, at Deloitte & Touche LLP, according to the article.
But, Delaporte wrote, there are caveats to the good news. Issues can stem from a variety of corners, including loan securitization, public partnerships, and the specter of an initial public offering.
“A lot more loans around here are being securitized by the lenders, and if your loan makes up more than 20 percent of the securitization, you’re subject to public SEC disclosure rules,” said Grace Singer, an audit partner at Berdon, according to the article.
[Click here for AccountingWEB’s articles on the FASB standard for interest rate swaps.]
IRS hearing explodes, Republicans inch toward contempt
In yesterday’s “Lunch Beat,” I included an article about how former IRS official Lois Lerner invoked her Fifth Amendment right and refused to answer self-incriminating questions about the IRS targeting scandal during a House Oversight and Government Reform Committee hearing Wednesday morning. I also included a link to an article about House Speaker John Boehner (R-OH) saying that if Lerner does not eventually testify about the IRS’s targeting of political groups, Congress should hold her in contempt.
Here’s more from yesterday’s hearing from Rachael Bade of Politico, which included a testy exchange between Oversight and Government Reform Committee Chairman Darrell Issa (R-CA) and ranking Democrat Elijah Cummings (D-MD).
[Also, here’s Kay Bell’s take of yesterday’s hearing courtesy of her blog, Don’t Mess With Taxes.]
Election politics shouldn’t stop tax revamp, Camp says
Speaking yesterday at a breakfast sponsored by the Christian Science Monitor, House Ways and Means Committee Chairman Dave Camp (R-MI) said Congress can make progress toward revamping the US tax code this year and shouldn’t wait until after the November election, wrote Richard Rubin of Bloomberg.
“I think nine months is a long time to coast,” Camp said, according to the article.
Rubin wrote that Camp plans to hold public hearings on his 979-page tax reform draft and said the public shouldn’t discount the possibility of action.
“I’m not just going to settle for mediocrity,” Camp said. “I’m not going to settle for things the way they are, and I don’t think the American people are either.”
[Click here to read an article by the Christian Science Monitor on Camp’s breakfast discussion on tax reform.]
A bipartisan fail on tax reform
Robert McIntyre, director of Citizens for Tax Justice, wrote an opinion piece for MSNBC today on the recent tax proposals by Camp and President Obama. He said both have apparently “swallowed the myth that the US corporate tax is too burdensome and makes the country ‘less competitive.’” McIntyre added this premise “is totally wrong.”
“The truth is that US corporate taxes are already low, and for many big companies virtually nonexistent,” he wrote. “And they’re usually lower than the taxes paid in the foreign countries where our multinationals do business.
“All of this dramatically contradicts the conventional wisdom in Washington that American corporations are overtaxed, and reaffirms what the general public knows,” McIntyre continued. “Here in the United States, the game is rigged in favor of the big multinational corporations. We need to fix this problem by making corporate America pay its fair share.”
Supreme Court expands whistleblower protections under Sarbanes-Oxley
By a vote of six to three, the US Supreme Court ruled on March 3 that whistleblower protections established under Sarbanes-Oxley do apply to employees of private firms that contract with publicly traded companies, Jaclyn Jaeger of Compliance Weekreported.
In a 56-page opinion authored by Chief Justice Ruth Bader Ginsburg, the High Court concluded that Sarbanes-Oxley “shelters employees of private contractors that serve public companies, just as it shelters the public companies' own employees.”
The decision overturns a lower-court ruling, which found that whistleblower protections under Sarbanes-Oxley apply only to employees of public companies, and not employees of private companies that contract with public companies, Jaeger wrote.
- How to speed the path to partner (Journal of Accountancy)
- Accounting complexity: What if “truth in labeling” were an accounting principle? (Accounting Onion)
- Filing your tax return is horrible – but it was worse 100 years ago (Forbes)
- Could you make tax protester theories work for you? (Forbes)
- How corporate America is losing the debate on taxes (Washington Post)
- Zen tips for tax time (Bloomberg Businessweek)
- Crimes against accounting (Commercial Observer)
About Jason Bramwell
Jason Bramwell is a staff writer and editor for AccountingWEB. He has nearly 20 years of experience in print and online media as a journalist and editor.