Tax Risk Markers Along the IFRS Roadmap

If you’ve ever complained about the complexity of corporate tax rules – wait – things are about to get more complicated. As part of a worldwide movement to standardize accounting rules, the U.S. Securities and Exchange Commission announced on Wednesday that it would be testing the waters with reg...

By Marie Leone • Aug. 29, 2008

Big Four: Get a Head Start on IFRS

The Securities and Exchange Commission’s new roadmap has given accounting experts and companies a reason to exhale. Now, at last, everyone knows the SEC’s vision and likely deadlines for moving the U.S. onto global accounting standards. However, as accounting firms caution, that sigh of relief wi...

By Marie Leone and Sarah Johnson • Aug. 28, 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

Revenue-Recognition Error Forces a Restatement

Shanghai-based Sunrise Real Estate Group Inc., which trades in the U.S., is restating prior results after determining that it misapplied revenue-recognition accounting rules.Sunrise said it revised its annual financial statements for 2007 and 2006, and for the March quarter. The new numbers incre...

By Stephen Taub • Aug. 28, 2008

The End of GAAP Could Begin Next Year

The Securities and Exchange Commission has raised the possibility that some U.S. publicly traded companies will be able to use international financial reporting standards next year. On Wednesday, the SEC commissioners proposed a timetable for transitioning all public companies from U.S. generally...

By Sarah Johnson and Marie Leone • Aug. 27, 2008

Grant Thornton Weighs In on Foreign Entities in U.S.

Recent reports of the groundswell of foreign-controlled domestic corporations (FCDCs) in the U.S. have suggested that high corporate taxes don’t discourage such activity here. But a study by Grant Thornton LLP cites evidence that overseas companies may actually have been holding back — and could ...

By Stephen Taub • Aug. 27, 2008

Avoiding a Problem? RAND Sees a Tax Crisis

The ability of corporate America to avoid income taxes is brewing as “corporate America’s next big scandal,” according to the RAND Corp. think tank.In an intriguing study titled “Issues over the Horizon,” RAND examined 11 areas — from reproductive science to failed voting machines to defense-spen...

By Alan Rappeport • Aug. 27, 2008

Changes to Declarations of Independence

Starting this fall, auditing firms will have to disclose to potential corporate clients any possibly conflicting relationships. A new independence rule approved by the Securities and Exchange Commission requires that auditors, before they are hired, share with audit committees information that ha...

By Sarah Johnson • Aug. 26, 2008

SEC to Reveal IFRS Start Dates This Week

On Wednesday, the Securities and Exchange Commission will propose a date for U.S. companies to be allowed to convert to international financial reporting standards. The long-awaited deadline will come in the form of a roadmap that the SEC commissioners will consider whether to propose — and which...

By Sarah Johnson • Aug. 25, 2008

Will Congress Act to Save Tax Break on Foreign Subs?

General Electric’s (GE) effective tax rate for the year ended December 31, 2007, was only 15.5 percent. The statutory rate, of course, is 35 percent. Virtually all of the discrepancy (between the statutory rate and GE’s effective rate) is explained by an item referred to as “tax on global activit...

By Robert Willens • Aug. 25, 2008

Convertible Bonds’ Goose Is Cooked

A highly structured convertible bond, considered by many to be a corporate treasurer’s dream, is about to fade from memory if accounting rulemakers and regulators get their way.The Financial Accounting Standards Board is circulating a draft proposal to revise FAS 128, the rule related to how comp...

By Marie Leone • Aug. 22, 2008

Whistleblowers Gone Wild? For Cash, Sure

If you’re a corporate whistleblower who turns in a coworker for dirty accounting tricks, the best reward you can hope for under Sarbanes-Oxley is the right to keep your job. (Although the high burden of proof under Sarbox’s whistleblower protection provision makes that outcome very unlikely, as C...

By Sarah Johnson • Aug. 21, 2008

After Fraud at Greencore, KPMG Is In, PwC Out

In the aftermath of a lengthy fraud at one of its subsidiaries, Irish convenience food company Greencore Group PLC has replaced PricewaterhouseCoopers as its auditor, choosing KPMG instead. In June, an internal audit found that costs were being hidden in Greencore’s Scottish mineral water divisio...

By Alan Rappeport • Aug. 20, 2008

PwC Rejiggers Its Member Firms

PricewaterhouseCoopers plans to reorganize its member firms this fall.Announced on Wednesday, the move is designed better position the Big Four accounting firm in emerging markets to make investments and acquisitions. The firm will also change its internal standards to make them more consistent a...

By Sarah Johnson • Aug. 20, 2008

To Foreign-owned Firms: An IRS Thank You

Foreigners are playing a fast-growing role in the U.S. economy — and paying an increasing share of corporate taxes compared to domestically controlled companies — according to a new Internal Revenue Service study.IRS data from the 2005 tax year (the most recent available) shows that there were 61...

By Stephen Taub • Aug. 19, 2008

Who Should Write the Rules?

A proposed new accounting rule has stirred fierce debate over whether companies should disclose estimates of the potential losses they face from lawsuits.But responses to the controversial proposal from the Financial Accounting Standards Board have also raised a much broader question: Should FASB...

By Tim Reason • Aug. 19, 2008

Don’t Let Tax Breaks Bail Out Banks, Grassley Urges

Banks could end up paying millions of dollars in penalties for peddling auction-rate securities, the irredeemable assets once billed to be as good as cash. But tax deductions are likely to reduce their pain, putting some of the burden back on taxpayers.That possibility rankles Iowa Sen. Charles G...

By Alan Rappeport • Aug. 19, 2008

The Rules that Launched a Thousand Deals?

Called the merger of “generic giants” by the New Jersey press, Jerusalem-based Teva Pharmaceutical Industries announced a definitive agreement in July to acquire the properties of Barr Pharmaceuticals in a transaction that will be structured as a “forward triangular merger.” A few potential snags...

By Robert Willens • Aug. 18, 2008

PCAOB Faults Flaws in KPMG’s Audits

KPMG failed to do the proper evaluations and testing procedures to back up its assessments of 10 clients, according to the most recent inspection report of the Big Four firm done by the Public Company Accounting Oversight Board. The PCAOB, which inspects the largest of the auditors annually, cite...

By Sarah Johnson • Aug. 18, 2008

Bar Fight: Accounting for Lawsuits

Financial Accounting Standards Board Chairman Robert Herz, in a letter to the Wall Street Journal today, defended FASB’s controversial proposal to require more company disclosure about potential lawsuit liabilities.Herz’s letter was a direct response to a sharply critical editorial, “FASB’s Lawye...

By Tim Reason • Aug. 18, 2008

Goodwill Burdens Scripps Balance Sheet

No doubt Dilbert would have something to say about non-cash accounting charges. Nevertheless, the comic strip’s syndicator, E.W. Scripps, is taking a $874 million goodwill accounting charge for a loss in value of its intangible assets.In its second quarter earnings announcement released on Monday...

By Marie Leone • Aug. 13, 2008

Fair Value: The Q2 Profit Vulture

Fair-value accounting took unusually large chunks out of energy companies’ second-quarter earnings. In the past two weeks, several companies have reported sharply lower profits due to the effect that high oil and gas prices had on their valuations of derivatives, which they measured at fair value...

By Sarah Johnson • Aug. 13, 2008

Contingent Liabilities Draft Ignites Ire

The U.S. Chamber of Commerce is speaking out sharply against the recent Financial Accounting Standards Board proposal to change accounting for contingent liabilities. The business-backed association claims that the Financial Accounting Standards Board’s exposure draft would force companies to pro...

By Kate Plourd • Aug. 11, 2008

How to Disqualify a Pension Plan

It has been reported that financial institutions have been eyeing underfunded or “frozen” corporate pension plans as a new line of business. The transaction being contemplated is a sort of rescue operation that involves a transfer of the stock of a “shell” subsidiary to the financial institution,...

By Robert Willens • Aug. 11, 2008

Get Ready to Reveal Credit-Swap Risks

Accounting rulemakers voted last week to keep the pressure on banks and other institutions that sell credit derivatives and push forward with a disclosure requirement aimed at helping investors get a better read on the financial instruments. In a 3-to-2 vote, the Financial Accounting Standards Bo...

By Marie Leone • Aug. 8, 2008

GM and Deloitte Settle $303 Million Suit

General Motors and Deloitte & Touche have agreed to settle a class-action securities lawsuit against them alleging the automaker filed misleading financial reports between 2002 and 2006. The lead plaintiffs in the suit were a pair of funds managed by Germany’s DekaBank. Under the terms of the...

By Tim Reason • Aug. 8, 2008