One Beneficiary of IFRS Switch: the Taxman

Advocates of the move toward international financial reporting standards claim the global rules would make U.S. companies’ financial statements look better. And studies show that, more often than not, a company’s earnings are higher under IFRS than when calculated under U.S. GAAP. But while new r...

By Sarah Johnson • Dec. 22, 2008

CFO Quits over Accounting Boo-boos

Medical-device maker ArthroCare Corp. says its CFO and two other officers have quit after its audit committee identified accounting errors and other possible irregularities.The errors are categorized into four areas: revenue recognition, expense reclassification, purchase-price allocation or inta...

By Stephen Taub • Dec. 19, 2008

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

Early Goodwill Testing on Tap

Add unscheduled goodwill impairment testing to the long list of tasks CFOs have to complete amid the credit crunch.As the recession drives stock prices down, the value of intangible assets will sink with them, likely triggering a goodwill impairment test under U.S. accounting rules, posits Greg F...

By Marie Leone • Dec. 19, 2008

KPMG Warns that Lee’s News Could Be Bad

Followers of the financial future of the newspaper business — already nervous because of giant Tribune Co.’s bankruptcy filing — got another shock as Lee Enterprises Inc. warned that its auditor is raising questions about its ability to continue as a going concern.The parent of the St. Louis Post...

By Stephen Taub • Dec. 17, 2008

Merger Guide for the Perplexed

Practical issues outweighed deeper merger-accounting questions on Monday, as the Financial Accounting Standards Board issued a proposed “Band-Aid” rule fix for the standard that governs business combinations. The rule change solves a perplexing problem for corporate accountants who said defense a...

By Marie Leone • Dec. 17, 2008

U.S. Grants Special Dispensation to REITs

While cash hoarding may not be a conventional reaction to the holiday spirit of giving, it is likely a prudent move for some cash-strapped companies. That is especially true of real estate investment trusts, which may be better off paying out dividends in stock, rather than cash.The National Asso...

By Robert Willens • Dec. 15, 2008

Grab Coveted Losses, Buy a Car Company

The Senate crushed hopes of an automotive-industry rescue on Thursday when it failed to pass a bailout bill. Then on Friday, the White House vowed to save America’s car industry from “a precipitous collapse.” Whatever happens over the next few days or weeks, it is worth taking a look at the poten...

By Marie Leone • Dec. 12, 2008

A Holiday Reconciliation Gift from the EU

In the spirit of global reciprocation, the European Union has extended its directive that allows U.S. companies to file financial results using U.S. generally accepted accounting principles. The directive, which waives the reconciliation requirement, was set to expire at the end of the year.The E...

By Marie Leone • Dec. 12, 2008

Ending the Exodus

If you are a director of a British company, your duties may now include flying to Dublin to attend board meetings. Fed up with Britain’s tax system, a small but growing band of firms have moved their headquarters—most recently WPP, a big advertising company. It took an oft-travelled route, remain...

By Economist Staff • Dec. 12, 2008

There’s a Cash Machine in Your Tax Department

Finance executives are leaving no stone unturned in their effort to find hidden cash before the end of the year. Caught in a credit crunch with limited power to borrow at reasonable interest rates, many CFOs, treasurers and controllers are diligently working to squeeze cash out of their organizat...

By Marie Leone • Dec. 11, 2008

Happy New Year, Global Accounting

As New Year’s resolutions are pondered around the globe, David Tweedie, chairman of the International Accounting Standards Board, is announcing his organization’s resolve to push through its agenda in 2009 — including many joint projects with its American counterpart, the Financial Accounting Sta...

By Marie Leone • Dec. 10, 2008

Everything We Learned about the Financial Crisis, Again

At the last big accounting industry conference of 2008, Robert Herz, chairman of the Financial Accounting Standards Board, reiterated what he has been saying all year: It was not fair-value accounting that worsened the credit crisis, but rather a capital markets house of cards built on complex an...

By Marie Leone and Tim Reason • Dec. 9, 2008

UK Inspectors Name Names in Grading the Big Four

UK inspectors of the Big Four firms have released reports noting ways that each of the auditors can improve its internal procedures — and identifying the shortcomings of individual firms more than its American counterpart does. The UK Audit Inspection Unit, which is part of the Professional Overs...

By Sarah Johnson • Dec. 9, 2008

Tribune’s Bankruptcy May Trigger Tax Complications

Of the many issues that surfaced after Tribune Co. filed for Chapter 11 protection yesterday, tax consequences were among the least discussed. But tax effects may be extremely cumbersome to deal with as the company works its way through bankruptcy, especially if Tribune loses its tax status as a ...

By Marie Leone • Dec. 9, 2008

PCAOB to Auditors: Turn Up the Skepticism

In its latest summary of its inspections of the eight largest audit firms — covering four years of reviews — the Public Company Accounting Oversight Board pings the auditors for failing to use enough professional skepticism in their audits of companies’ financial statements. Audit deficiencies ha...

By Sarah Johnson • Dec. 8, 2008

Court Precedent Looms over IRS “Crisis” Fix

A rule change released by the Internal Revenue Service regarding so-called controlled foreign corporations (CFCs) may give tax managers pause as they head to the end of the year. The reason: the change — dubbed Notice 2008-91 — and put in place to help companies weather the credit crisis, could f...

By Robert Willens • Dec. 8, 2008

Watchdog Puts Auditors on High Alert

The Public Company Accounting Oversight Board is warning auditors to take special care in the current down market, scouring for places where management manipulation or mistakes will be more likely than ever. “As is the case in any audit, but even more important in the current environment, adequat...

By Sarah Johnson • Dec. 8, 2008

Cox: Accounting Is Not a Fiscal Policy Tool

Bankers and other financial industry players who hoped the financial crisis might prompt a suspension of fair-value accounting found their hopes disappointed today. Although improvements in guidance and auditing practices are needed, investors still consider fair-value accounting useful and meani...

By Tim Reason • Dec. 8, 2008

Cashing In

View the full results of the REL/CFO Europe 2008 Cash Masters Scorecard or only those results that appeared in print.For most of the six years he has been CFO of Actelion, Andrew Oakley can’t recall ever having to field questions from analysts seeking information about how efficiently Europe’s la...

By John Zhu • Dec. 8, 2008

Report Your Financials, Big Four Audit Firms Urged

Like the philosopher Diogenes, who spent his days looking for an honest man, Donald Nicolaisen is still looking for a transparent audit firm.Nicolaisen, a former chief accountant for the Securities and Exchange Commission, was the co-chair, with former SEC Chairman Arthur Levitt, of a committee n...

By David Katz • Dec. 5, 2008

USG Reworks Poison Pill to Save Tax Break

In an effort to protect its accumulated tax benefits, USG Corp. has made it far easier for someone acquiring stock in the company to trigger its “poison pill” plan.The building-products company already had in place a shareholder rights plan — that is, a poison pill — designed to deter any person ...

By Stephen Taub • Dec. 5, 2008

Accountants Now Taking the Shift to IFRS More Seriously

More than half of U.S. accountants are preparing for widespread adoption of international financial reporting standards in this country, according to the American Institute of Certified Public Accountants. They apparently began to take the IFRS movement more seriously after the Securities and Exc...

By Sarah Johnson • Dec. 4, 2008

Internal Auditors: Mission Unaccomplished?

The roles of the internal audit function, defined loosely, are to make the business better and to keep it out of trouble — but the two don’t necessarily get equal time. In the several years following the passage of the Sarbanes-Oxley Act in 2002, at the typical U.S. public company the pendulum sw...

By David McCann • Dec. 4, 2008

Charges Add to Mining Company’s llls

The collapse in metals prices has taken a huge toll on Freeport-McMoRan Copper & Gold Inc. The world’s largest copper and gold miner, which Wednesday announced major production cutbacks and the suspension of its dividend, also said it recorded charges to operating income for lower-of-cost-or-...

By Stephen Taub • Dec. 3, 2008

Can Buybacks Reduce Corporate Tax Writeoffs?

On the same day HLTH Corporation cancelled its merger with majority-owned (84 percent) subsidiary Web MD Health, the company announced a massive stock buyback. On Oct. 20, HLTH said it would repurchase fully 43 percent of its outstanding stock. But the repurchase may limit the health information ...

By Robert Willens • Dec. 1, 2008