Seaboard Reports Consolidation Error

Seaboard Corp., the company that seven years ago lent its name to a Securities and Exchange Commission policy of leniency toward companies that self-report wrongdoing, announced yesterday in a regular filing the discovery of an accounting error in one of its business units related to consolidatio...

By Tim Reason and Stephen Taub • Aug. 8, 2008

Qwest Forced to Pay for Ex-CFO, Ex-CEO

Qwest Communications International Inc. says it agreed to contribute another $40 million to a previously agreed-to class-action settlement, apparently to cover claims against former chief executive Joe Nacchio and former chief financial officer Robert Woodruff. Nacchio and Woodruff agreed to cont...

By Stephen Taub • Aug. 8, 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

Hedge Accounting Snags Teekay

Teekay Corp. said it plans to restate its financial results going back to 2003 to adjust its accounting treatment for derivative transactions under a complex hedge accounting rule. The oilfield services company said the restatements will have no impact on cash flows, liquidity, or shareholders’ e...

By Stephen Taub • Aug. 7, 2008

Submit Your Tax Query Before Aug. 31

The Internal Revenue Service announced today that businesses and associations have until August 31, to submit projects to be included in the agency’s Fall 2008 Industry Issue Resolution (IIR) Program review. The IIR was set up to allow corporate taxpayer to submit requests to the IRS regarding in...

By Stephen Taub • Aug. 7, 2008

Independence Breach Costs E&Y $2.9 Million

Ernst & Young LLP agreed to pay more than $2.9 million to the Securities and Exchange Commission to settle charges that it violated auditor independence rules by co-producing a series of audio CDs with a man who was also a director at three of E&Y’s audit clients.According to the SEC, Ern...

By Tim Reason and Stephen Taub • Aug. 7, 2008

Fair-Value Quirk Spurs Ambac Profit Gain

A much-criticized new fair-value disclosure provision that can turn an increase in a company’s credit risk into an earnings boost has done just that for Ambac, the beleaguered bond insurer.As a result of the provision of FAS 157, Ambac was able to parlay the widening credit spreads it suffered as...

By David Katz • Aug. 6, 2008

IRS Offers 45 Companies a Deal to Exit Tax Shelters

The Internal Revenue Service has offered 45 companies a deal to end their involvement in certain banned tax shelters, called lease-in/lease-out (LILO), and sale-in/lease-out (SILO) systems, according to the Associated Press. The companies are engaged in more than 1,000 of the transactions, which ...

By Stephen Taub • Aug. 6, 2008

Gulp! A Tax Play that Uses a Poison Pill

It is unusual for a solvent company to threaten to swallow a poison pill to protect its tax rebates. But that is exactly what Hovnanian Enterprises did this week, in announcing its adoption of a shareholder rights plan to preserve tax benefits related to its net operating losses.The tactic, which...

By Marie Leone • Aug. 6, 2008

Revenue Estimating Errors Force TVA to Restate

TVA, the nation’s largest public power provider, said it will restate its financial statements for fiscal 2006 and 2007, as well as for some recent quarterly periods, to correct errors in the way it estimated unbilled revenues.“These revisions do not change our financial health,” CFO Kim Greene s...

By Stephen Taub • Aug. 6, 2008

Global Standards: Jilted at the Altar?

A word of advice to those holding their breaths until the Securities and Exchange Commission issues a deadline for U.S. companies to convert from the use of generally accepted accounting principles to international financial reporting standards: exhale.To judge from the views expressed on Tuesday...

By David Katz • Aug. 5, 2008

Contingent Liabilities Draft Stirs It Up

With the deadline looming this Friday for public comment on how companies should account for contingent liabilities, the battle lines are clear. And a battle it should be.On one side, investors with a social-responsibility mandate think current accounting disclosure rules are too lax. They suppor...

By Marie Leone • Aug. 4, 2008

Kraft Cereal Deal Avoids Tax Crunch

Filling breakfast bowls with everything from Shredded Wheat to Cocoa Pebbles, the Post cereal company claims that “everyone’s taste is a little different.” So when its parent company, Kraft Foods, split off the division today, it seemed fitting to use a unique flavor of divestiture — a “reverse M...

By Robert Willens • Aug. 4, 2008

Mulling the Fair-Value, Historic-Cost Choice

If investors must continue to decipher a puzzling mix of historical-cost and fair-value lingo when they read corporate financials, the Financial Accounting Standards Board should consider requiring companies to be consistent in the kind of measurement they use for each business activity, says FAS...

By David Katz • Aug. 1, 2008

Q Rule Delayed; Did Banks Win Again?

The quest to “kill the Q,” or qualified special purpose entities, by amending accounting rules is still on track to happen. But banks and other companies won’t have to consolidate the assets held in their QSPEs until 2010, a year later than originally expected.On Wednesday, the Financial Accounti...

By Marie Leone • July 30, 2008

Is Your Company a Tax Deadbeat?

What does it say about Corporate America when Internal Revenue Service records show 1.6 million businesses owing over $58 billion in unpaid federal payroll taxes?And what does it say about the IRS that such a total, which includes interest and penalties as of last Sept. 30, is known to it, but ha...

By Stephen Taub • July 30, 2008

Monolines Are Feeling Safer from FAS 163

Monoline bond insurers, hit hard by the credit crisis, received a rare piece of good news this week: credit ratings agency Moody’s Investors Service is telling them that a recently-issued accounting rule requiring more disclosure will not damage their financial strength or their ratings. The rule...

By Alan Rappeport • July 30, 2008

How to Find America’s Tax Havens

Companies feeling a severe tax bite in urban centers like New York or Chicago may find much cheaper pastures in some of America’s very own tax havens, such as San Juan or Saginaw, Mich. A new report by the audit, tax, and advisory firm KPMG examined the different types of taxes that companies fac...

By Alan Rappeport • July 30, 2008

IRS Swats the Killer B

The Internal Revenue Service has issued new guidance on so-called Killer B transactions, the triangular reorganizations that involve foreign controlled corporations. For the second time since early June, the IRS has taken decisive steps to prevent what it obviously considers one of the most objec...

By Robert Willens • July 29, 2008

PCAOB Approves Succession Rule

The Public Company Accounting Oversight Board on Tuesday approved a new rule that will allow accounting firms to keep their registered status after a merger or change of name. The rule—and the accompanying form—spells out the circumstances where a firm can keep its registration status even if i...

By Alan Rappeport • July 29, 2008

What Belongs in Your Discontinued Ops?

One small step at a time, the Financial Accounting Standards Board is tightening up the criteria for what qualifies as a discontinued operation on a corporate income statement. This time the board has targeted a subset of discontinued operations: newly acquired subsidiaries that are classified as...

By Marie Leone • July 25, 2008

GAO: Defense Dept. Auditors Too Cozy with Contractors

A report released this week by the Government Accountability Office found that the Defense Contract Auditing Agency, which audits defense contractors, has a “serious independence issue.” In three cases, the GAO charges, Department of Defense officials and officials of the companies contracted to ...

By Kate Plourd • July 24, 2008

Northwest Takes $547 Million Impairment Charge

Northwest Airlines has taken an additional $547 million non-cash impairment charge. The embattled airline, which is expected to complete its merger with Delta Air Lines before the end of the year, had previously taken a $3.9 billion non-cash goodwill impairment charge in the first quarter. In rep...

By Stephen Taub • July 24, 2008

Deloitte Revenues Top $27 Billion

Deloitte Touche Tohmatsu announced Tuesday that its annual revenues were $27.4 billion, the sixth consecutive year the Big Four firm’s revenues have grown by a double-digit percentage.The accounting firm said those results, aggregated from all its member firms for fiscal year 2008, represented a ...

By Tim Reason • July 23, 2008

It Takes Two to Restate

Two very different companies — WellCare Health Plans Inc. and the Toyota Motor Credit Corp. arm of the Japanese automaker — reported that accounting errors were forcing them to restate three years of financials.WellCare’s case reflects a longer history of accounting problems. The company, which p...

By Stephen Taub • July 22, 2008

SEC: Ex-CFO Used Spreadsheets for Fraud

The former CFO of a company that produces electronic databases of archived information from publishers settled charges made by the Securities and Exchange Commission that, with the use of spreadsheet aids, he made fraudulent monthly and quarterly and accounting entries for more than five years.As...

By Stephen Taub • July 22, 2008