Questionable Yield

Eliminating the double tax on corporate dividends — the centerpiece of George W. Bush’s latest tax plan — is by no means a new idea in Washington, having been kicked around in one form or another at least since Jimmy Carter’s Administration. This time, though, the idea has a fighting chance of be...

By Craig Schneider and Tim Reason • April 1, 2003

A Little Respect for Stock Purchases under Sec. 338

Sometimes fact is fiction–especially regarding elective recognition of a gain or loss by a target company under Sec. 338(h)(10). Indeed, if certain elections are executed, related to a qualified stock purchase, a series of tax “fictions” unfurl.Under Sec. 338(h)(10) of the federal Tax Code, parti...

By Robert Willens • March 19, 2003

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

No Tax Break for AOL’s $100b in Goodwill

The goodwill created by the combination of AOL and Time Warner, in substantial part, is “impaired.” And, accordingly, a whopping $100 billion of goodwill was written off by the media giant. The question, however, is does this write-off provide the company with an equivalent reduction in its taxab...

By Robert Willens • March 10, 2003

Surf’s Up; Taxes Are Down

Spectacular beaches and topnotch surfing opportunities weren’t the reasons Landmark Networks Inc., a Silicon Valley, Calif.-based wireless start-up with no profits or customers, decided to move to Hawaii late last year.Instead it was the favorable investing climate, including a 100 percent state ...

By Alix Stuart • March 1, 2003

Group B: Ready for the Big Four?

Are any of the Group B accounting firms in position to challenge the Big 4?As contributing editor Ed Zwirn reveals in his article “The Second Six: Ready to Step Up?”, the demise of Andersen and the advent of Sarbanes-Oxley have not been an unqualified blessing for those firms that remain. And in ...

By CFO Editorial Staff • Feb. 10, 2003

Standards Bearer

Paul Volcker’s second career is shaping up to be as influential as his first. Until recently, his claim to fame rested primarily on his tenure as Federal Reserve Board chairman from 1979 to 1987, when his tight money policy broke the back of the double-digit inflation that doomed Jimmy Carter’s q...

By A CFO Interview • Feb. 1, 2003

Same Straw, Smaller Back

“We’re too small to bear the expense of being a public company,” says John Clary, CEO of Monrovia, California-based Clary Corp., which employs 40 to 50 people and generates $6 million to $8 million in annual revenue. “Every year the regulations get more complex.”“The federal government and the St...

By Ed Zwirn • Feb. 1, 2003

The Second Six: Ready to Step Up?

Only a decade ago, an article that mentioned the largest public accounting firms in the United States would most likely refer simply to the Big 8. Today, after several mergers and one very high-profile departure, we’re down to the Big 4.Some of the Big 8 may be not only gone, but forgotten. (Sure...

By Ed Zwirn • Feb. 1, 2003

An Eye for Old Collectibles

A few years ago, Joel Lewis, then a collection manager for a large utility, found a stunning receivable in a pile of overdue accounts he was in charge of collecting. The utility was owed $800 by a couple named Fido and Fifi de Dog.While Lewis never settled the dubious account, he did hone his col...

By Joseph McCafferty • Feb. 1, 2003

Guess Again

The high number of financial restatements has alarmed investors and analysts recently. But one accounting professor welcomes the announcements. In fact, he suggests that companies revise portions of their financial statements every year.Baruch Lev, a professor at the Stern School of Business at N...

By Kris Frieswick • Feb. 1, 2003

Auditor Independence: Separation Anxiety

Tax services looked to be about the only function auditors could safely perform for their audit clients under the Sarbanes-Oxley Act of 2002. But new rules from the Securities and Exchange Commission, along with impending changes in the accounting industry, could well force companies to split up ...

By Alix Stuart • Feb. 1, 2003

Prove It

As if the ex­Andersen partners in its midst weren’t enough of a reminder of the accounting profession’s woes, the audience at a recent conference of the American Institute of Certified Public Accountants got a stiff warning that the Securities and Exchange Commission will no longer be content to ...

By Tim Reason • Feb. 1, 2003

Questions of Value

Despite 29 years as an accountant in the United States and abroad, Robert H. Herz still considers himself an economist by training and disposition. “I got into accounting to get a job, basically,” he says.Which, as casual career plans go, worked out pretty well. Last July, Herz became chairman of...

By Tim Reason • Feb. 1, 2003

Off-Balance-Sheet Financing On the Way Out?

After evolving over the last quarter-century into one of the most popular corporate finance tools in the United States — taking such forms as securitizations, synthetic leases, and unconsolidated entities — it seems that off-balance-sheet financing is being deconstructed in a hurry.This month the...

By Marie Leone • Jan. 8, 2003

Credit Watch

Later this month, the Securities and Exchange Commission — courtesy of the Sarbanes-Oxley Act of 2002 — will issue a report on the state of credit-rating agencies. The subject of two days of congressional hearings in November, the SEC’s report will likely address transparency in the rating proces...

By A CFO Interview • Jan. 1, 2003

The Big Eight

It’s a typesetter’s nightmare.PricewaterhouseCoopers+DeloitteTouche Ernst & Young KPMG.But could it be a reality? Could the current Big Four end up the Really Big One?Not likely. But remember, for much of the seventies and eighties, the Big Eight public accounting firms seemed like a fraterni...

By David Katz • Dec. 31, 2002

Accounting Standards

The Financial Accounting Standards Board announced in October that it is considering a shift from rule-based toward principles-based accounting standards. The move would bring U.S. accounting closer to international standards, which some argue could have helped prevent the recent accounting scand...

By Joseph McCafferty • Dec. 1, 2002

Fault Lines

On April 29, 1999, E. David Gable’s improbable dream came true. Carnegie International Corp., a small Internet support and computer telephony holding company he took over three years earlier, graduated from the OTC Bulletin Board to a listing on the American Stock Exchange. Gable, a former car de...

By Joseph McCafferty • Dec. 1, 2002

Escaping Post-Bankruptcy Tax Constraints

Bankruptcies that stem from product liability claims—like asbestos—can hound corporations even after the company satisfies the claimants and emerges from insolvency. Witness the company executives that aim to preserve and utilize, as quickly as possible, the net operating losses(NOLs) created by ...

By Robert Willens • Nov. 6, 2002

The Never-Ending Audit

New developments in computer software could lead financial executives and accountants to completely change the way they conduct corporate audits. The question is whether that would be a good thing — and whether it could prevent the next Enron.So-called continuous-auditing software promises to tra...

By Peter Krass • Nov. 1, 2002

Align the Books

If investors had seen WorldCom’s tax return the year before the telecom giant collapsed, would it have told them there was trouble brewing? You bet, say some tax experts. “WorldCom’s [incorrect] capitalization of expenses would have jumped out at everybody in the difference between financial and ...

By Tim Reason • Nov. 1, 2002

1968 Baseball Tax Ruling Still a Hit

In 1968, Major League Baseball’s (MLB) Chicago White Sox had the second-worst record in the American League, squeaking out just ahead of the hapless Washington Senators. The ChiSox only won 67 games, the team batting average was .228, and the club’s fearsome slugger, Pete Ward, hit a grand total ...

By Robert Willens • Oct. 25, 2002

IRS Not Permitted to Argue Against Its Own Guidance

When the Internal Revenue Service publishes a revenue ruling, taxpayers whose situations are covered by the ruling ought to be able to rely on the mandate in planning and executing transactions. Right?Likewise, the government should not be able to disavow the ruling (if it has not been previously...

By Robert Willens • Oct. 16, 2002

How to Issue Honest Earnings Reports

The National Investor Relations Institute (NIRI) adopted a tough set of guidelines for companies when they report earnings, including more forthcoming reporting of pro forma results.The guidelines arose from a 10-point program NIRI announced back in April as a way of helping to restore investor t...

By Stephen Taub • Oct. 10, 2002

A Good Year for Outsiders

Lee Graul says he’s starting to see the door open. Open slightly, mind you, but open nonetheless. And that, he says, is better than having his nose pressed up against the glass.As director of the SEC practice for accountancy BDO Seidman (SEED-man), Graul helps court new audit clients for the Chic...

By Joseph Radigan • Oct. 2, 2002