A One-Two Accounting Punch?

Will American companies have to go through a major accounting-standards overhaul twice? Some finance executives think so. They say the project to converge American and international standards is at odds with the push to introduce a host of new U.S. accounting rules over the next year, and warn th...

By Marie Leone • May 18, 2010

The Upside to a Downstairs Merger

Retail Ventures Inc. (RVI) is a holding company whose principal asset is 62% of the stock of DSW Inc., a footwear retailer. From an organizational perspective, DSW has a “high vote/low vote” stock structure — with RVI holding all of the high-vote, Class B stock. In fact, RVI’s 62% equity interest...

By Robert Willens • May 17, 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

IFRS Risk: Not What You Think

Today’s CFO is accustomed to managing risk. But few financial executives in the United States accurately perceive or understand the emerging risks that are associated with the global convergence of financial reporting standards (convergence). As a result, CFOs across America are wasting time and ...

By Bruce Pounder • May 14, 2010

GAAP’s Lawsuit Buffer

The debate over whether principles-based accounting standards are better than rules-based standards has divided many accountants, and stymied regulators who want to move U.S. accounting toward less-prescriptive guidance.One argument against that nearly decade-long push has been that moving away f...

By Sarah Johnson • May 12, 2010

FASB Hits the Jackpot Question

There is apparently a wide diversity in practice regarding the manner in which a casino operator accounts for slot-machine and other jackpots. With the issuance of Accounting Standards Update No. 2010-16, Accounting for Casino Jackpot Liabilities, the Financial Accounting Standards Board has intr...

By Robert Willens • May 10, 2010

A Smoother Approach to Pension Accounting

The International Accounting Standards Board’s long-awaited exposure draft on IAS 19, the standard that governs pension accounting, may turn out to be good news for companies. In a reversal of the proposals that were originally floated, under the exposure draft the impact of asset gains and losse...

By Alix Stuart • May 4, 2010

An Arm’s Length IPO

A transaction described in a private-letter ruling from the Internal Revenue Service resembles, but is not identical to, the recent divestiture by Citigroup of its Primerica stock. Similar to the case featured in the letter, the Citigroup transaction was carefully structured to achieve the benefi...

By Robert Willens • May 3, 2010

Double Trouble? Maybe Not

In 1972, Richard Nixon made an historic visit to China and deftly exploited the rivalry between that country and the Soviet Union to the ultimate advantage of the United States. Did he provide a lesson for CFOs?While getting in touch with your inner Nixon may sound like curious advice, when it co...

By Marie Leone • May 1, 2010

Unfazed by IFRS

If the Securities and Exchange Commission decides to force American companies to abandon U.S. generally accepted accounting principles in favor of international financial reporting standards, how will investors react? They will be “underwhelmed,” says Aaron Anderson, director, IFRS policy and imp...

By Marie Leone • April 30, 2010

Capex Cuts Still Boosting Cash Flow

Like children of the Great Depression who stuffed cash under their mattresses as adults, many companies have taken the lessons learned during the liquidity scares of late 2008 to heart. They have become cash hoarders after watching traditional short-term borrowing methods dry up or become cost-pr...

By Sarah Johnson • April 29, 2010

The IRS Picks On the Little Guy

The Internal Revenue Service has cut the amount of time it spends auditing large companies by a third since 2005, while reducing the number of large companies audited by 22%, according to a new study. In fact, last year the IRS audited only one in four corporate returns reporting assets of $250 m...

By Marie Leone • April 28, 2010

Are Surplus Notes Disguised Equity?

In connection with a settlement related to credit derivatives and other structured financings, Ambac Assurance Corp. (AAC) announced in March that it will transfer some $2 billion principal amount of “surplus notes” (along with $2.6 billion in cash) to certain counterparties. In an 8-K filing, Am...

By Robert Willens • April 26, 2010

Balance Sheets Are Busting Out All Over

New accounting rules governing off-balance-sheet transactions went into effect for most companies in January. As a result, 53 large companies have already estimated that they will have put back an aggregate $515 billion in assets to their balance sheets during the first quarter, according to a ne...

By Marie Leone • April 23, 2010

Trouble on the High Seas

The rise in manufacturer and retail inventories marking the end of the great “destocking” has been good news for the U.S. economy as a whole, but it’s causing problems for companies transporting goods by ship from overseas, particularly from Asia.Heavier demand for space on container ships has pu...

By Vincent Ryan • April 21, 2010

Internal Audit’s IT Blues

As companies automate more business processes, they may risk leaving their internal auditors scrambling to catch up, at least according to a new survey that finds internal auditors are not confident in their ability to monitor the soundness of IT processes.Protiviti, a risk-management and interna...

By David McCann • April 20, 2010

Could Codification Weaken Internal Controls?

On July 1, 2009, the Financial Accounting Standards Board formally adopted its Accounting Standards CodificationTM (ASC) as the source of authoritative generally accepted accounting principles for nongovernmental entities in the United States. The codification profoundly changed the way U.S. GAAP...

By Bruce Pounder • April 16, 2010

What Is the Auditor’s Role in Finding Fraud?

In the standard audit reports that accompany corporate financial statements, the auditor’s responsibility for detecting fraud is not discussed. Indeed, the word fraud isn’t mentioned at all. Yet whenever an accounting deception is uncovered, one of the first questions investors ask is, “Where wer...

By Sarah Johnson • April 13, 2010

Forming a Joint Venture Is Not a Sale

An issue settled more than 30 years ago undoubtedly informed the manner in which Comcast and General Electric structured their joint venture arrangement regarding the “sale” of NBC Universal.NBC Universal is valued at about $30 billion, and the agreement between the two companies, announced in De...

By Robert Willens • April 12, 2010

Past Layoffs Could Provide Tax Refund

Layoffs have been a grim feature of the economy over the past few years. Last month alone, such big names as Sallie Mae, BP Solar, and Siemens joined smaller companies like furniture maker Knolls, electrical-wiring manufacturer Pass & Seymour/Legrand, and medical-equipment supplier Rom-Hill i...

By Marie Leone • April 9, 2010

Xilinx Vindicated: No Need to Share ESO Costs

Xilinx Inc. researches, develops, manufactures, and markets integrated circuit devices and related development software systems. With a view toward expanding its business in Europe, Xilinx established Xilinx Ireland (XI).Xilinx and XI entered into a “cost and risk sharing agreement” that stated t...

By Robert Willens • April 5, 2010

Auditing Your Auditor

When telecommunications provider IDT decided to switch auditors from Ernst & Young to Grant Thornton in early 2008, the “driving force was to save money,” says CFO Bill Pereira. It worked. Part of a companywide effort to reduce corporate overhead, the move cut IDT’s $4.3 million audit bill al...

By Tim Reason • April 1, 2010

Accounting-Related Lawsuits Fall

Shareholder class actions citing accounting issues fell last year to their lowest level since the passage of the Private Securities Litigation Reform Act, which transformed private litigation beginning in 1995.Just 37% of the 155 federal filings in 2009 mentioned possible accounting problems, acc...

By Sarah Johnson • April 1, 2010

Slow Burn

As sales rebound and customers queue up for trade credit again, your cash flow could be at risk. Not from customer defaults — the number of global corporations that defaulted on bonds this year stood at just 16 as of March 1, down from 35 at the same point last year — but from buyers taking their...

By Vincent Ryan • April 1, 2010

SEC to CFOs: More Repo Disclosure

The Securities and Exchange Commission is asking public-company CFOs for additional information about repurchase agreements, or repos, the transactions Lehman Brothers used to make its balance sheet look healthier before the investment bank collapsed into bankruptcy.The SEC wants companies to hel...

By Marie Leone • March 31, 2010

Not All Royalty Costs Are Capitalized

Robinson Knife Manufacturing Co. is a corporation in the business of designing, manufacturing, and marketing kitchen tools. During the years at issue, Robinson used two well-known licensed trademarks: Pyrex and Oneida. The agreements gave Robinson the exclusive right to manufacture, distribute, a...

By Robert Willens • March 29, 2010