When Can a Process Be Patented?

An individual, Bernard Bilski, applied for a patent. His application sought patent protection for a claimed invention that explains how buyers and sellers of commodities in the energy market can hedge against the risk of price changes.The patent examiner rejected the application, and the Board of...

By Robert Willens • July 12, 2010

How Good Is Your Auditor’s Technology?

Smaller companies would do well to investigate the technological proficiency of accounting firms they consider hiring, judging by the results of recent research.In a survey by Bay Street Group and Capstone Marketing, 112 CPA firms rated themselves on a 10-point scale as to how well they achieve t...

By David McCann • July 9, 2010

Explore the Trendline➔

Tax policy shifts: What CFOs need to know to stay ahead

Discover how evolving tax policies are creating new opportunities and challenges for CFOs.

By CFO.com staff

Former Bristol-Myers CFO Goes Free

In a case his attorney says could have had a “chilling effect” on senior financial executives’ communications with analysts if it had gone the wrong way, Frederick Schiff, a former CFO of Bristol-Myers Squibb, won a deferred prosecution agreement from a New Jersey federal court last week. Schiff ...

By David Katz • July 6, 2010

State Tax Credits Do Not Imperil REITs

In a private letter ruling released by the Internal Revenue Service last year, a corporate taxpayer asked the agency for an opinion related to state tax credits and real estate investment trusts. The IRS guidance (LTR 200916014) is particularly germane in light of the recent BP Deepwater disaster...

By Robert Willens • July 6, 2010

GAAP and IFRS: Six Degrees of Separation

Next year American and international accounting standard setters will complete their eight-year mission to develop one set of global rules. In the end, the so-called convergence project will make U.S. generally accepted accounting principles look more like international financial reporting standa...

By Marie Leone • June 30, 2010

Cutting Your Losses? Review the Accounting

In guidance released last year, the Internal Revenue Service determined that research and development costs must be included in long-term contract costs, even if the agreement between companies is nixed. Revisiting the guidance is particularly relevant in a sluggish economy, where companies may b...

By Robert Willens • June 28, 2010

IFRS: Paralyzed or Prepared?

In my previous column, I noted that U.S. CFOs have been wasting time and money in anticipation of an event that will not happen. Specifically, U.S. companies will not be forced to switch from using U.S. generally accepted accounting principles (GAAP), as we know GAAP today, to using international...

By Bruce Pounder • June 22, 2010

Avoiding the “Mutually Exclusive” Deal Trap

Whether or not your company is ready to jump into a new restructuring deal, it’s prudent to examine how the Internal Revenue Service views transaction costs, especially with regard to “mutually exclusive” transactions. Consider a case in which a U.S. corporation (USCorp) hires a consultant to pro...

By Robert Willens • June 21, 2010

Free Cash Flow: At the Brink?

On the heels of a powerful wave of cost cutting, U.S. corporations have boosted their free cash flow to historic levels. But with little left to cut, they may soon find themselves on the brink of a drop in cash from which only a return of revenue can save them.Still, mainly through restraints for...

By David Katz • June 21, 2010

The Rich Are Different: They’re Optimistic

F. Scott Fitzgerald famously observed that the attitudes of the wealthy and the not-so-wealthy differ sharply. Perhaps providing a current example of the difference, high-end consumers are displaying a lot more optimism about the state of the economy than average customers are revealing, accordin...

By David Katz • June 17, 2010

IRS Attacks “Blocker” Partnerships

A new regulation from the Internal Revenue Service targets so-called blocker partnerships, making certain income held by foreign investors taxable in the United States. In the past, if there was no “effectively connected income” between a blocker corporation and its foreign investors, the corpora...

By Robert Willens • June 14, 2010

Auditors’ Lingering Doubts

Last year ended on a somewhat optimistic note, as economic growth finally moved back into positive territory. However, based on their evaluations of 2009’s financial reports, many auditors are still worried about their clients’ prospects for survival.In fact, accounting firms expressed doubts abo...

By Sarah Johnson • June 10, 2010

Goodwill Charges Sink Like a Rock

Goodwill impairment charges dropped dramatically in 2009, falling nearly 73% from the prior year, says a new study from KPMG. The decline is mostly attributable to an increase in the amount of goodwill write-downs taken in 2008, which left less goodwill on corporate balance sheets in 2009, says K...

By Marie Leone • June 8, 2010

Can Warrants Be Used to Complete a Spin-Off?

As corporate finance executives begin to review new merger and acquisition deals, it is interesting to consider what a handful of older tax court cases have to say about warrants and spin-off deals. Indeed, it appears that the use of warrants to complete a spin-off is a difficult, but not impossi...

By Robert Willens • June 7, 2010

Removing Unsightly Tax Credit Buildup

Every year like clockwork, tax credits expire and Congress vows to extend them for another 12 months. It’s that time again.This year’s so-called tax extenders bill is officially titled the American Jobs and Closing Tax Loopholes Act (H.R. 4213). Passed by the House on May 28, the bill now goes to...

By Marie Leone • June 3, 2010

To Cut Working Capital, Try Bonuses

One big reason companies sometimes find it hard to set up continuous working capital improvement practices is that their managers suffer from short attention spans. During the recent credit crunch, many finance chiefs decided to milk their companies’ supply chains for extra cash, resorting to sho...

By David Katz • June 3, 2010

Ex-Diebold CFOs Charged with Fraud

Three former finance executives, including two CFOs, from Diebold Inc. have been charged by the Securities and Exchange Commission with accounting fraud, the SEC announced on Wednesday. The agency has filed a separate enforcement action against the company’s former CEO seeking reimbursement of ca...

By Marie Leone • June 2, 2010

Why Semantics Matter in Noncompete Pacts

Mr. E (E) owned 23% of the stock of Recovery Group Inc. (RGI). An agreement between E and RGI called for the company to pay the partial owner a total of $805,363.33. Of that total, $400,000 was for a “non-competition and non-solicitation” agreement that prohibited E from engaging in “competitive ...

By Robert Willens • June 1, 2010

What’s New? Don’t Ask

 In recent years, finance departments have been suffering from their own version of chronic fatigue syndrome. Symptoms include overstretched staffing resources, extra consulting fees, and an overall weariness with the steady stream of regulatory and accounting rule changes, which have run from tw...

By Sarah Johnson • June 1, 2010

Working It Out: The 2010 Working Capital Scorecard

Read the complete results of the 2010 working capital survey, or review just those results that appeared in print.While most observers view 2009 as the very heart of the Great Recession, it was also — in terms of working capital — the beginning of the Great Hangover. As 2008 drew to a close and t...

By David Katz • June 1, 2010

Someone Is Up to No Good

This month, the Association of Certified Fraud Examiners (ACFE) will release its 2010 “Report to the Nation on Occupational Fraud and Abuse,” a study of more than 1,800 cases of corporate fraud — 60% of which occurred in the United States (see “Something Wicked This Way Comes“). How much do you k...

By Marie Leone • June 1, 2010

Lesson from the Downturn: Cut Inventory, Not People

Relying heavily on layoffs and wage reductions to cut costs over the past year, midsize and small businesses missed a huge opportunity to generate cash out of improvements in inventory and working capital, a newly released survey suggests.The potential to cut costs by slashing inventory seems esp...

By David Katz • May 28, 2010

Leases Headed for the Balance Sheet

Equipment leasing is finally on the upswing. The volume of new commercial-equipment leasing rose 15% in April, compared with the same period in 2009. That’s the first year-over-year increase seen in the $518 billion equipment-finance market since July 2008, according to the Equipment Leasing and ...

By Marie Leone • May 27, 2010

Tax Sticklers, Not Schemers

On June 1, the Internal Revenue Service will close the comment period for its controversial proposed rule on uncertain tax positions. As written, the proposal would require companies to disclose how much they keep in reserve to cover the possibility that the IRS or state tax officials might disal...

By Marie Leone • May 26, 2010

A Costly Look at How Sausage Is Made

Last year the shareholders of C&F Packing Co. found themselves on the winning side of a trade-secret settlement. Unfortunately, the shareholders also were handed a tax bill along with the award. Once again, a tax-court ruling underscored a lesson corporations still fail to remember: that cert...

By Robert Willens • May 24, 2010