Journal of Accountancy articles from August 2008

Journal of Accountancy archives from August 2008

Managing intellectual property.
August 1, 2008... [ILLUSTRATION OMITTED] It would be inexcusable for a company to have no idea of the value of its inventory or plant and equipment. But, in fact, many companies know neither the full extent of intellectual (intangible) properties they own...

A better way to gauge profitability: systematic ratio analysis using the advanced DuPont model.
August 1, 2008... EXECUTIVE SUMMARY * Return-on-equity (ROE) is the correct profit metric to evaluate the performance of a business. However, the primary emphasis on financial ratio analysis must be on operating performance. * The "advanced" version of...

Long-term care insurance and tax planning: make the most of tax rules for premiums and benefits.
August 1, 2008... EXECUTIVE SUMMARY * Long-term care (LTC) insurance benefits are tax-free to the insured for either reimbursement of qualified expenses or payments up to a per-diem limit indexed for inflation--$270 in 2008. * Premiums for LTC insurance...

Taking emotion out of the decision.
August 1, 2008... Much has been written in financial planning periodicals regarding the pros and cons of long-term care insurance, perhaps because it is still in its infancy compared to other insurance products. While most individuals don't question the need for...

Managing corporate divestiture transactions: learn how to organize and oversee a common, but less popular, M&A activity.(mergers and acquisitions)
August 1, 2008... EXECUTIVE SUMMARY * Corporate divestitures, the sale of stock or assets of a segment of a business, are an important class of business transaction by virtue of their pervasiveness (more than one-third of all M&A activity in a given year)...

Successfully navigating OPEB: new standards cast light on governments' post-employment liabilities.(other post-employment benefit)
August 1, 2008... EXECUTIVE SUMMARY * GASB released two important standards intended to disclose the nature and extent of non-pension post-employment benefit liabilities largely related to health care. Governments are not required to fund the liability, but...

The standard-bearer: chairman examines AcSEC's changing role and the progress of international convergence.(Accounting Standards Executive Committee, Ben Neuhausen )(Interview)
August 1, 2008... [ILLUSTRATION OMITTED] Ben Neuhausen took the helm of the Accounting Standards Executive Committee in 2005 and led the all-volunteer AICPA committee through a tumultuous time during which its responsibilities shifted. On his watch as...

Developing a CRM strategy in your firm: size up clients to build a competitive advantage.(customer relationship management)
August 1, 2008... EXECUTIVE SUMMARY * When a customer relationship management (CRM) strategy is integrated with a firm's overall strategic plan, it helps the firm perceive and respond to business and economic trends. * CRM strategy starts with an...

Make the most of mentoring: hands-on coaching can maximize the potential of your firm's young talent.
August 1, 2008... EXECUTIVE SUMMARY * The definition of mentoring is expanding to include the concept of coaching, which is focused on helping others learn job-related skills for growth. * In today's rapidly changing work environment, young accountants...

General business provisions.(Tax Developments Affecting Small Businesses)
August 1, 2008... Sec. 179 Expense Deduction The Small Business and Work Opportunity Tax Act of 2007 (SBWOTA) (1) and the Economic Stimulus Act of 2008 (2) have increased the amount that businesses can deduct under Sec. 179. In tax years 2003-2009...

S corporations.(Tax Developments Affecting Small Businesses)
August 1, 2008... S Corporation Returns Sec. 6699 imposes a new penalty in addition to the penalties under Sec. 7203 (willful failure to file, supply information, or pay tax) for failure to timely file (including extensions) an S corporation return. A...

Partners & partnerships.(Tax Developments Affecting Small Business)
August 1, 2008... Joint Venture of Husband and Wife A joint venture conducted by a husband and wife generally is treated as a partnership for federal tax purposes. SBWOTA added Sec. 761(f), which allows a "qualified joint venture" to not be treated as a...

Limited liability companies.(California)(Tax Developments Affecting Small Businesses)
August 1, 2008... LLC Fees in California In 1994, California enacted legislation that allowed the formation of limited liability companies (LLCs) in the state. In addition, the legislation included a provision that imposed a yearly fee on LLCs that were...

Employee benefits.(Tax Developments Affecting Small Businesses)
August 1, 2008... Cafeteria Plan Prop. Regs. Sec. 125, governing cafeteria plans, was added to the Code in 1978, (41) and proposed regulation were issued in 1984, 1989, 1997, and 2000. However, the IRS finalized only the portions of proposed regulations on...

Employment taxes.(Tax Developments Affecting Small Businesses)
August 1, 2008... Disregarded Entities Recognized as Separate Entities for Employment and Excise Taxes The Service has issued final regulations that treat QSubs and other disregarded entities (DEs) as separate entities for federal employment tax and certain...

The scholarship trap for foreign students.
August 1, 2008... [ILLUSTRATION OMITTED] Many U.S. colleges and universities recruit foreign students, especially for graduate programs and athletics. Such students often receive full scholarships that include room and board, making them subject to U.S....

LILO comes up one leg short.(lease in, lease out)
August 1, 2008... The Fourth Circuit Court of Appeals held that a LILO (lease in, lease out) transaction by banking company BB&T Corp. was not a genuine leasehold interest but only a circular transfer of funds. In so ruling, the Fourth Circuit upheld a district...

Congress passes expat rules.
August 1, 2008... Just before the Memorial Day holiday, the U.S. House and Senate passed by unanimous consent and voice vote, respectively, HR 6081, the Heroes Earnings Assistance and Relief Tax Act. The act provides benefits to military personnel, funded in...

Common-law mailbox rule reopened.(filing date of tax return )
August 1, 2008... The Third Circuit Court of Appeals has reaffirmed as still valid the "common-law mailbox rule"--that a properly mailed document is presumed to reach the IRS within normal delivery time--despite holdings by other circuits that the rule was...

When (and where) is it filed?(income tax return filing and statute of limitations)
August 1, 2008... The Fourth Circuit recently upheld a Tax Court decision that a deficiency notice beat the three-year statute of limitations only because the taxpayer had hand-delivered his returns to the wrong office. The IRS is generally required by IRC...

Equal treatment for all taxpayers.
August 1, 2008... The Tax Court reversed its prior decision in a "retail tax shelter" case, granting further relief from assessments to approximately 400 taxpayers. It did so because the IRS secretly--and fraudulently--entered into more favorable settlements...

IRS embarks on penalty regime overhaul.
August 1, 2008... The Service has issued long-awaited proposed regulations that implement changes made by the Small Business and Work Opportunity Tax Act of 2007 to the return preparer penalties in IRC [section][section] 6694 and 6695 and related provisions...

FASB No. 163 Statement of Financial Accounting Standards No. 163 - Accounting for Financial Guarantee Insurance Contracts (an interpretation of FASB Statement No. 60).
August 1, 2008... Space considerations prevent publishing here the appendices to FASB Statement 163. Since the appendices often are important to understanding FASB statements, readers are advised to obtain complete copies. For additional copies of FASB...

Amendment to Code of Professional Conduct Appendix A - Council Resolution Designating Bodies to Promulgate Professional Standards.
August 1, 2008... On May 18, 2008, the AICPA governing Council designated the International Accounting Standards Board (IASB) as the body to establish professional standards with respect to international financial accounting and reporting principles under Rule...

The last word. (recruiting minority students to the accounting profession)
August 1, 2008... I've been in this profession basically since I was 16 years old, along with all four of my brothers and sisters, in the footsteps of our late father, Benjamin L. King. At some point all of us have worked in the family firm. My two sisters,...