Journal of Accountancy articles from December 2008

Journal of Accountancy archives from December 2008

2008 in review: congressional impact on CPA profession.(certified public accountants)
December 1, 2008... The AICPA enjoyed three legislative victories in Congress this year: equalizing IRS reporting standards for taxpayers and preparers, preventing the Farm Credit System from expanding its pool of borrowers, and maintaining financial and...

Component materiality for group audits.
December 1, 2008... EXECUTIVE SUMMARY * Regulator inspections and firms' quality reviews have revealed a variety of methods used by group engagement partners in determining component materiality and have identified potentially troubling matters with some of...

Forecasting post-combination earnings: FASB 141(R) can have a dramatic effect on future income statements.(Financial Accounting Standards Board)
December 1, 2008... EXECUTIVE SUMMARY * Under the acquisition method of financial accounting for business combinations as required by FASB Statement no. 141 (R), the acquiring company should recognize and measure all identifiable assets acquired and...

Managing customer profitability: determine which customers are most valuable to your organization.
December 1, 2008... [ILLUSTRATION OMITTED] EXECUTIVE SUMMARY * The customer value management cycle presents a comprehensive model for measuring and managing customer value--it has five recurring steps. * Step 1: Manage Customer Segmentation. Customer...

Test-driving the codification: accounting research on the fast track.
December 1, 2008... [ILLUSTRATION OMITTED] EXECUTIVE SUMMARY * FASB released the FASB Accounting Standards Codification in January. The codification simplifies the classification of accounting standards by restructuring all authoritative U.S. GAAP for...

States bite into broken gift cards: understanding the impact of state escheat laws.
December 1, 2008... [ILLUSTRATION OMITTED] EXECUTIVE SUMMARY * Escheatment of gift cards creates challenges for both businesses and regulators. Reporting and compliance requirements can be consequential and can place businesses at risk because...

On the verge of an academic revolution: how IFRS is affecting accounting education.(international financial reporting standards)
December 1, 2008... For those charged with educating the next generation of accountants, the expected shift from U.S. GAAP to IFRS stirs up a host of potentially thorny issues. Professors and college administrators are dealing with questions about the timing of...

Highlights of accounting systems research: keep up with the latest findings on the impacts of IT investments.(information technology)
December 1, 2008... [ILLUSTRATION OMITTED] This article is the fourth in a series reviewing research relevant to practicing accountants. Previous articles covered auditing, management accounting and tax. Recent, top-ranked journals that cover accounting and...

Withholding from foreign payments: IRM section offers insight.(Internal Revenue Manual)
December 1, 2008... [ILLUSTRATION OMITTED] CPAs with clients whose responsibilities include withholding and remitting taxes on payments to foreign individuals and entities can help those clients understand guidelines and institute sound practices. Often,...

"Significant purpose" of tax avoidance trumps document privilege.
December 1, 2008... The U.S. District Court for the Northern District of Illinois required Valero Energy Corp. to produce documents sought by the IRS, saying they were not protected by the tax practitioner privilege of IRC [section] 7525 because they concerned a...

Twin outcomes from Cap Gemini deal.
December 1, 2008... In two more of at least four similar cases, former Ernst & Young consulting partners were denied refunds of tax they paid on stock received from a merger with Cap Gemini that lost most of its value while in restricted accounts. In 2000,...

Lease buyout portion of purchase ruled deductible.
December 1, 2008... A taxpayer bought the property it occupied as a tenant and was allowed a business deduction for the portion of the purchase price attributable to an excessive lease. ABC Beverage Corp. (then known as Beverage America) in 1995 acquired via...

Royalties from related party are ordinary income.
December 1, 2008... The Second Circuit Court of Appeals affirmed the Tax Court's decision that an individual's receipt of patent royalties was ordinary income, not long-term capital gain, because the payments were made in exchange for patent rights transferred to...

Late returns, late wife.
December 1, 2008... The U.S. District Court for the Western District of Louisiana held that a taxpayer could use the married filing jointly status on delinquent tax returns for the five tax years preceding the year his spouse had died. The government...

Proof of material participation must be credible.
December 1, 2008... A taxpayer must prove material participation in an activity to deduct losses from that activity against nonpassive income. The Ninth Circuit reaffirmed that credible evidence must be presented to prove that one of the material participation...

IRS auditor's pups unprofitable.
December 1, 2008... The Tax Court disallowed an IRS auditor's deductions for breeding greyhounds as a hobby loss. Ralph Thomas Whitecavage bred and raised the dogs for racing. He received a percentage of their race winnings but did not realize a profit. The IRS...

New treatment for second-home proceeds: partial gain from sale of principal residence.(from The Tax Adviser)
December 1, 2008... The 2008 Housing and Economic Recovery Act, enacted in late July, changes the rules for the partial exclusion of gain from the sale of a residence. For sales after Dec. 31, 2008, the IRC [section] 121 exclusion of gain will not apply to any...

AICPA ... where to turn. (American Institute of Certified Public Accountants) (Directory)
December 1, 2008... AICPA Contact Information AICPA Logo 919/402-4440 CPA Accessory Collection (Big Game Outfitters) 212/596-6299 CPA Logo ...

The last word. (automotive safety for schoolchildren) (Texas)
December 1, 2008... How can some people argue against safety for schoolchildren? [ILLUSTRATION OMITTED] My daughter, Ashley, was on a motor coach with her teammates of the West Brook High School girls varsity soccer team, here in Beaumont, Texas, on March...