Tax Rules Cause Static for Radio Company

Radio-station operator Emmis Communications will restate its financials for its most recent fiscal year and first quarter to correct an error in its provision for income taxes, the company said Friday in a regulatory filing.Last year the company, which has stations in New York, Chicago, Los Angel...

By David McCann • Oct. 9, 2009

IFRS Returns to the Front Burner

The debate over whether U.S. companies should be forced to use international accounting standards took on new life last month when the Securities and Exchange Commission assured investors, companies, and accountants that the project is still active. Once the SEC announced it hadn’t lost sight of ...

By Marie Leone • Oct. 8, 2009

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

Why Small Biz Isn’t Ready for IFRS

Following the release of a private-company version of international accounting standards this summer, most smaller U.S. companies are not signing on to the idea of switching from U.S. rules — at least not yet. Accounting firms that focus on smaller businesses say their clients are in no rush to a...

By Marie Leone • Oct. 6, 2009

Xerox Deal Should Easily Clear Tax Hurdles

Xerox Corp., to the surprise of many observers, announced an agreement on September 28 to acquire Affiliated Computer Services (ACS) in exchange for a combination of cash and Xerox stock. The deal is conditioned on securing an opinion of counsel that it will qualify as a reorganization, which wou...

By Robert Willens • Oct. 5, 2009

As Easy as A-S-C

Thanks to the Financial Accounting Standards Board’s five-year effort to distill all of the existing accounting literature into a single database, the jumble of acronyms that make up generally accepted accounting principles (GAAP) has been edited down to a trio of letters. Instead of FAS, FIN, SO...

By Kate O'Sullivan • Oct. 1, 2009

The IRS Keeps the Heat on Inversion Transactions

At one time, so-called inversion transactions were quite popular. A U.S. corporation — for example, a company such as Ingersoll-Rand or Nabors Industries — would create a new foreign corporation located in a tax haven. The shareholders of the U.S. corporation would convey their stock to the new f...

By Robert Willens • Sept. 28, 2009

Most Auditors Ace Internal Controls Tests

Auditors mostly did a good job of complying with Auditing Standard No. 5 during 2008, the standard’s first full year of effectiveness, the Public Company Accounting Oversight Board said in a report released Thursday. But the PCAOB also revealed in its review of how 250 audits conformed to the new...

By David McCann • Sept. 25, 2009

Mixed Signals: A New Reason to Revisit Materiality

Regulators have long criticized companies for restating their financial results without providing investors with a large red flag — a Form 8-K — to announce that previously issued financial statements should no longer be trusted. Indeed, over the past few years the Securities and Exchange Commiss...

By Sarah Johnson • Sept. 24, 2009

How to Answer an SEC Comment Letter

The Securities and Exchange Commission is extending an invitation to public companies to “pick up the phone” and start a “dialogue” with its Division of Corporation Finance, says an SEC official. At an industry meeting held in New York last Friday, Steven Jacobs, an associate chief accountant wit...

By Marie Leone • Sept. 23, 2009

IRS Widens Net on Mortgage Securitizations

Many commercial mortgage loans are held in “securitization” vehicles, such as real estate mortgage investment conduits (REMICs) and investment trusts. In each case, the entity is not subject to tax with respect to its income; instead, its income is taxed to its beneficial owners. As a result, ens...

By Robert Willens • Sept. 21, 2009

Internal Audit: The Continuous Conundrum

Internal audit departments looking to start a “continuous auditing” program are entering an area that is either quite crowded or sparsely populated. The root of this seeming contradiction is, like a lot of things related to continuous auditing, a matter of definition.To be sure, continuous auditi...

By David McCann • Sept. 18, 2009

Global Standards Alive and Kicking, SEC Accounting Chief Says

The roadmap to the convergence of U.S. and global accounting standards is alive and well and a Securities and Exchange Commission priority, says James Kroeker, the commission’s chief accountant. The roadmap is a loose time line for the transition of U.S.-based public companies to the use of inter...

By Marie Leone • Sept. 17, 2009

New Revenue-Recognition Rules: The Apple of Apple’s Eye?

While Steve Jobs was preparing to introduce the new Apple iPod nano last week, the company’s chief accountant, Betsy Rafael, was sending off a second letter to the Financial Accounting Standards Board related to revenue recognition. At issue: how FASB might rework the rules related to recognizing...

By Marie Leone • Sept. 16, 2009

Trade Creditors Ease Up on the Deadbeats

Although companies are seeing more of their customers having a hard time paying their bills these days, many aren’t sending more overdue invoices to collection agencies or lawyers than they usually do. Indeed, only about one-third of companies are quicker about turning over their delinquent accou...

By Sarah Johnson • Sept. 16, 2009

Ford’s Poison Pill Prevents Tax Losses

In a move to safeguard billions of dollars in tax assets, the board of Ford Motor Co. has adopted a poison-pill plan to preserve the carmaker’s net operating losses (NOLs). The tax benefit preservation plan, announced on Friday, allows Ford to thwart a technical change of ownership, which under f...

By Marie Leone • Sept. 15, 2009

Taking Losses for Worthless Stock

Applying tax-loss rules to situations involving worthless subsidiaries can be tricky. Assessing whether the rules apply to banks also can be complicated. However, a breakdown of the law into manageable pieces illustrates the logic of including banks in the same categories as operating companies.C...

By Robert Willens • Sept. 14, 2009

Kraft Finds a New Place to Cut Costs: Purchasing

To keep their bottom lines stable in a time of anemic revenues, many companies have slashed their workforces and inventories to the bone and watched their receivables and payables like hawks. Have they reached the point where there’s nothing else to cut?Currently lusting to acquire Cadbury and se...

By David Katz • Sept. 9, 2009

Mickey, Spiderman Suit Up with “Belt and Suspenders”

For all the hard-charging, high-flying, death-defining bravado that Marvel comic characters exude, the corporate union between Marvel Entertainment and The Walt Disney Co. is anything but splashy. In fact, from a tax perspective, it is as risk-averse as, well, Snow White. A look at the deal detai...

By Robert Willens • Sept. 9, 2009

Be Thankful They Don’t Take It All

“If you drive a car, I’ll tax the street/ If you try to sit, I’ll tax your seat.” The Beatles may have been joking when they wrote the lyrics of “Taxman”, but the authorities could soon be tempted to use some of their ideas.The credit crunch has revealed as many holes in government finances as th...

By Economist Staff • Sept. 4, 2009

Lawsuit to Turn on Fair-Value Feud?

At the heart of a contentious court case between a company and its ex-parent is an accounting question that has been dogging corporate finance executives for the better part of a year. That is, what is the fair value of a company’s contingent liabilities? The answer may help a bankruptcy court de...

By Marie Leone • Sept. 2, 2009

Managing Inventory: How Long Will Small Be Beautiful?

Not all recessions are alike. The current downturn, for instance, stirs a memory in Charles Mulford of how different the situation was 35 years ago.It was 1974, the first year of a two-year recession sparked by the Federal Reserve’s tight-money policy. Mulford, now an accounting professor at Geor...

By David Katz • Sept. 2, 2009

IFRS Critic to Leave Accounting Firm Regulator

Charles D. Niemeier, a board member of the Public Company Accounting Oversight Board, announced Wednesday that he plans to leave the PCAOB in the near future.Niemeier was an outspoken critic of a proposal made by the Securities and Exchange Commission, then under chairman Christopher Cox, to aban...

By Tim Reason • Sept. 2, 2009

Supply Chains and Demand

The metaphor of the global supply chain, meant to convey strength through interconnectedness, has lately come to symbolize the opposite: companies dragging each other down as one fails to gauge demand while another struggles to meet it, or to manage the cash flow needed to remain a viable part of...

By Russ Banham • Sept. 1, 2009

Transfer Pricing: A World of Pain

Yet another unwelcome side effect of the global recession: hungrier international tax authorities. Experts say that officials in previously tax-friendly countries, including China and India, are looking to fill their coffers by extracting more from U.S.-based multinationals. Among their favorite ...

By Alix Stuart • Sept. 1, 2009

The Silent Treatment

Is there anybody out there? Financial regulators and accounting standard–setters sometimes wonder.At a panel discussion in July, Wayne Carnall of the Securities and Exchange Commission’s Division of Corporation Finance chided companies for their tepid response to the SEC’s call for comments on th...

By Jason Karaian • Sept. 1, 2009