Don’t Panic: Health-Care Hit Is Minimal

AT&T, Caterpillar, and Deere are among the companies that are reporting large first-quarter accounting charges because of the repeal of a tax deduction by the new health-care law. But the charges will have little effect on company valuations or cash flow, analysts say.The Patient Protection a...

By Marie Leone • March 29, 2010

Ahead of the Accounting Curve, Too

With its iPad device ready to hit U.S. retail shelves next week, Apple continues to build on its reputation as a revolutionary technology company. But the computer giant is also ahead of the curve in accounting, as shown by its early adoption of new revenue-recognition rules.In January Apple anno...

By Marie Leone • March 25, 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

Hindsight Is Prejudicial, Not 20/20

In guidance laid out in a chief counsel advisory notice, the Internal Revenue Service concluded that under some circumstances, a company cannot make what is known under the tax code as a Section 336(e) election. A Section 336(e) election relates to the criteria allowing some stock sales and distr...

By Robert Willens • March 22, 2010

Jobs Bill Becomes Law

President Obama signed the Hiring Incentives to Restore Employment (HIRE) Act into law Thursday morning, taking aim at the nation’s persistent 10% unemployment rate, which is widely seen as one of the biggest obstacles to a sustained economic recovery. The law, which passed the Senate on Wednesda...

By Kate O'Sullivan • March 18, 2010

Looking at Historic Businesses Through an NOL Lens

When a corporation with net losses undergoes an ownership change, within the meaning of the tax code’s Section 382(g), limits are imposed on the amount of taxable income1 that may be offset by the company’s prechange losses. This limit is known as the “Section 382 limitation” and it is calculated...

By Robert Willens • March 15, 2010

Good to the Last Drop

Despite the overall lack of top-line growth during the economic downturn, many companies have stayed afloat by downsizing staff and eking out supply-chain efficiencies. In the face of continuing unemployment and the attendant lag in consumer demand, however, how long can companies maintain respec...

By David Katz • March 12, 2010

Goodwill Impairment: Open to Interpretation, Again

A relatively new goodwill accounting rule got its first real test drive last year when the ripple effect from the 2008 recession hit company balance sheets. More than two-thirds (68%) of public companies in the United States recognized a goodwill impairment under the rule known as Topic 350 (form...

By Marie Leone • March 11, 2010

No Excuses, No Surprises

Painful and costly as a major corporate financial scandal can be, it can ultimately help a company grow stronger if executives can unearth the problems that spurred the crisis and fix them. That was the result of a process that began when 250 Munich police officers raided the corporate offices of...

By David Katz • March 9, 2010

Homebuilder Loss Claim Crumbles

Homebuilders recently scored a major tax victory by securing the ability to carry back certain losses — referred to as “applicable net operating losses (NOLs)” — for five years. Ordinarily, under the Internal Revenue Code — specifically, Section 172(b)(1)(A)(i) — an NOL can be carried back only t...

By Robert Willens • March 8, 2010

Restatements on the Decline

The number of financial restatements fell in 2009 for the third year in a row, according to a new report. The report, by research firm Audit Analytics, posits that the Sarbanes-Oxley Act and the Securities and Exchange Commission are behind the decline.Overall, 630 companies filed 674 restatement...

By Alix Stuart • March 4, 2010

Cracking Down on Independent Contractors

Employers may want to reexamine how they label their workers this year, as federal and state officials vow to clamp down on the misclassification of employees as independent contractors.The Internal Revenue Service plans to look at the issue in audits of 6,000 randomly chosen companies during the...

By Sarah Johnson • March 3, 2010

The Shortest Distance to Cash

Which is more valuable, gold or beryllium? John Grampa’s answer — gold — probably won’t surprise you, but his reasoning might. Gold is worth more than beryllium to his company, Brush Engineered Materials, not because it can fetch more in the metals market but because products made from it can be ...

By David Katz • March 1, 2010

R.H. Donnelley Denied Much-Needed Tax Refund

Editor’s note: On February 1, 2010, R.H. Donnelley emerged from Chapter 11 bankruptcy protection as Dex One Corp.Marketing-services company R.H. Donnelley Corp. filed a consolidated income-tax return for the year ending December 31, 1994, on time. The Internal Revenue Service examined the return ...

By Robert Willens • March 1, 2010

Debating Inflation

Just as the economy seems to be creeping back to health, a new study by McKinsey & Co. offers finance executives a fresh concern: inflation.While various commodity prices have spiked over the past few years, the authors argue that low interest rates and high government spending could spark a ...

By Alix Stuart • March 1, 2010

Now You Don’t See It

Distraction and deception go hand in hand, whether in a magic act or at a dishonest company. Sam Antar, the ex-CFO of electronics retailer Crazy Eddie, kept auditors away from the company’s fraudulent practices in the 1980s in part by having his staff distract them with constant small talk and in...

By Sarah Johnson • March 1, 2010

Your Loss Is Your Gain

When companies closed their books on 2008, the financial crisis made itself very apparent: 3,700 publicly held corporations reported losses, a 9% increase over the previous year. Enter Congress, which offered a corporate tax break on a scale not seen since the aftermath of the terrorist attacks o...

By Marie Leone • March 1, 2010

Nonplussed by Non-GAAP

Lawrence Hyatt knew when it was time to give up. “Maybe I’m a good enough poker player that I know when to hold ’em and when to fold ’em,” says the CFO of O’Charley’s Inc., which runs three well-known restaurant chains.To be sure, his opponent — the Securities and Exchange Commission — had a natu...

By Sarah Johnson • March 1, 2010

SEC on IFRS: Not So Fast

The Securities and Exchange Commission has extended its time line for requiring U.S. publicly traded companies to apply international financial reporting standards to their financial statements: the earliest that U.S. companies may be able to use IFRS is now 2015. The deadline in the SEC’s origin...

By Sarah Johnson and Marie Leone • Feb. 26, 2010

Tax Departments: Progressive or Not?

For years, CFO has documented the slow rise of women to the top of the corporate finance department. At last count, just 9% of Fortune 500 finance chiefs were women, a number that has held steady for several years, while fewer than 20% of either controllers or treasurers at those companies were w...

By Alix Stuart • Feb. 25, 2010

Detroit Breakdown: IRS Denies Spin-off Treatment

In late January, the Internal Revenue Service released a determination related to the tax treatment of post-spin-off payments. The memorandum came from the agency’s Detroit area field office, and discussed a situation involving two unnamed companies, which we believe to be Ford Motor Co. and car ...

By Robert Willens • Feb. 22, 2010

Obama Budget to Spark Tax Debates

President Obama’s budget submission contains numerous tax proposals, many of them quite “hostile” towards business in general and “high-income” taxpayers in particular. Many of the proposals are aimed at eliminating, or at least curtailing, tax preferences enjoyed by the oil and gas industry. In ...

By Robert Willens • Feb. 16, 2010

A Tax Victory for Multinationals

When the Obama Administration released its budget for fiscal 2011 last week, tax executives at U.S. multinationals breathed a sigh of relief. Conspicuously missing from the budget was a controversial proposal to reform the “check-the-box” tax rule, a loophole in the tax code that companies have b...

By Marie Leone • Feb. 12, 2010

Spreadsheets and Banking Fee Deductions

The Internal Revenue Code, specifically Section 162(a), states that a deduction is allowed for all ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. That may seem simple enough, but corporate taxpayers must consider how a related rule —...

By Robert Willens • Feb. 8, 2010

CFOs Head to the IASB

A former and a current CFO will join the International Accounting Standards Board this year. Elke König, onetime CFO of Germany’s Hannover Re Group, and Darrel Scott, CFO of South Africa’s FirstRand Banking Group, have been appointed to the IASB for five-year terms, beginning in July and October,...

By Marie Leone • Feb. 5, 2010

Cablevision Shoots for an MSG Spin-off

Cablevision intends to spin off the stock of its Madison Square Garden Inc. (MSG) subsidiary on February 9, 2010. On that date, holders of Cablevision’s Class A stock will receive, with respect to each share, one-quarter of a share of MSG’s Class A stock. Similarly, holders of Cablevision’s Class...

By Robert Willens • Feb. 1, 2010