Accounting Rule Caveat May Be Relief for Real Estate

A clarification to the Financial Accounting Standards Board’s Statement 140, brought on by concerns from the real estate market, will be a balm for the U.S. real estate finance industry, which viewed the rule as a threat to one of its major sources of capital, according to a Reuters report.FAS 14...

By CFO Editorial Staff • July 18, 2001

Auditor Independence Body To Wrap Up Duties At Month End

The Independence Standards Board, charged with developing tougher standards for auditors, will discontinue operations at the end of July, regulators said.According to a Dow Jones Newswires report, after four years of operation, the board has largely fulfilled its mission, according to an announce...

By CFO Editorial Staff • July 18, 2001

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

Of Acquisitions and Spin-offs

At the end of 2000, the IRS issued proposed regulations that define the circumstances under which an acquisition will be treated [within the meaning of Sec. 355(e)] as part of a plan or series of related transactions that includes a spin-off. If the acquisition and spin-off are, in fact, part of ...

By Robert Willens • July 17, 2001

FASB Change May Turn Analysts’ Focus to Cable Firms’ Net

According to Dow Jones Newswires, the Financial Accounting Standards Board’s new rule eliminating goodwill amortization could change the way analysts look at cable firms’ balance sheets.Many analysts focus on cable operators’ earnings before interest, taxes, depreciation and amortization, or EBIT...

By CFO Editorial Staff • July 16, 2001

Spate of Writeoffs Calls 1990s Profit Boom Into Question

The recent spate of writeoffs by major firms like AT&T Corp., Cisco Systems Inc., Lucent Technologies Inc., Nortel Networks Inc., Walt Disney Co., and Wells Fargo Inc. calls into question the lofty profits of the 1990s, says the Wall Street Journal.Since the economy began to slide in the four...

By CFO Editorial Staff • July 13, 2001

FASB Proposes Amendment to FAS 67

The Financial Accounting Standards Board on Tuesday proposed to amend Statement No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects. The proposed amendment would exclude from its scope the accounting for acquisition, development and construction costs of real estate...

By CFO Editorial Staff • July 11, 2001

Safety-Kleen’s Restatements Reduce Earnings from 1997 to 1999

Safety-Kleen Corp., awash in accounting woes that prompted it to seek bankruptcy-court protection a year ago, said in a filing with the Securities and Exchange Commission that a restatement of financial results reduced its earnings by about $534 million for the fiscal years 1997 through 1999, rep...

By CFO Editorial Staff • July 10, 2001

I.R.S.’s “Loss Disallowance Rule” Invalidated

In a case involving Rite Aid’s ability to deduct a loss sustained on a sale of the stock of a subsidiary, the Court of Appeals for the Federal Circuit, in allowing the loss deduction, invalidated a portion of the I.R.S.’s controversial “loss disallowance rules”, found in Reg. Sec. 1.1502-20. Thes...

By Robert Willens • July 10, 2001

Congress May Reexamine Tax Shelters

Legislation aimed at closing down corporate tax shelters could soon surface on Capitol Hill, Senator Charles Grassley, R-Iowa, the ranking minority member of the Senate Finance Committee says.According to Dow Jones Newswires, the panel, now chaired by Senator Max Baucus, D-Mont., held hearings on...

By CFO Editorial Staff • July 10, 2001

Red-handed?

Pension accounting is starting to raise eyebrows all over Wall Street, according to the current issue of Barron’s.Analysts — including Morgan Stanley, which last week released a controversial report alleging that a good chunk of Qwest Communications International Inc.’s earnings came from pension...

By CFO Editorial Staff • July 9, 2001

Treasury Seeks Advice on Financial Instrument Taxation

The U.S. Treasury and Internal Revenue Service, perplexed as to how a certain type of swap arrangement should be taxed, are calling for help on that question and seeking advice on a much wider issue: the appropriate taxation of financial instruments generally, according to Dow Jones Newswires.Amo...

By CFO Editorial Staff • July 6, 2001

Accounting Investigations Grow to Highest Number Yet

The Securities and Exchange Commission’s list of companies under investigation for possible accounting fraud is growing longer, just as the agency’s limited resources are being stretched more than ever before, says the Wall Street Journal.SEC officials say they have nearly 260 accounting investig...

By CFO Editorial Staff • July 6, 2001

Courts Adopt Coherent Framework for Analyzing

Recently, two U.S. Circuit Courts of Appeal considered decisions that had been rendered by the U.S. District Court and the U.S. Tax Court, respectively, with respect to transactions that can be characterized as “tax shelters.” In each case, the lower court had ruled against the taxpayer; in I.E.S...

By Robert Willens • July 3, 2001

Congress Starts to Work on Business Tax Breaks

With scant money left for business tax cuts, Congress is scouring for other ways to pay for them — including business tax increases, reports the Wall Street Journal.Republicans want to attach as much as $30 billion in business- related tax breaks over 10 years to the minimum-wage bill, which is e...

By CFO Editorial Staff • July 2, 2001

Balancing Act

In April, Financial Executives International (FEI) and the National Investor Relations Institute (NIRI) joined forces to issue guidelines for earnings press releases that they hope will establish industry best practices for these sometimes too-rosy reports. The guidelines were the result of prodd...

By Leslie Schultz • July 1, 2001

Life under FAS 133

The rules of accounting issued by the Financial Accounting Standards Board rarely generate enthusiasm in the corporate reporting community. But few have caused more outright resentment among business leaders than FAS 133, “Accounting for Derivative Instruments and Hedging Activities.”Nearly a dec...

By Andrew Osterland • July 1, 2001

Life in a Fishbowl

At the top of the agenda on May 1, when the audit committee of Brunswick Corp. met, were the nonaudit fees paid last year to Arthur Andersen LLP, the company’s external auditor.The $3.3 million Andersen got for tax advice, acquisition due diligence, and help with new accounting pronouncements, th...

By Stephen Barr • July 1, 2001

Four Ways to Say Goodbye to Goodwill Amortization

With the ink on the official ballots barely dry, experts are already dishing out advice on how to best tackle the adoption of FASB’s newly approved merger accounting standards.Hey, it’s their job. At CFO.com, we’ve compiled some of these best practices early on to make your transition to the new ...

By Craig Schneider • June 29, 2001

Intangibles Revealed

Over the next year, companies could wind up spending some serious dollars to determine the fair value of intangibles and business units.Such valuations are required in FASB’s new merger rules, which require that goodwill and other intangibles be tested for impairment rather than regularly amortiz...

By Craig Schneider • June 29, 2001

Pool’s Closed

After all the shouting, the pooling-of-interests method of merger accounting is coming to an end with a whimper, not a bang. The predicted rush of firms launching pooling deals before the June 30 deadline didn’t materialize. Generally, in fact, CFOs seem to be taking the loss of pooling in stride...

By Craig Schneider • June 29, 2001

Cramming for the Final

Are you ready? On June 29, the Financial Accounting Standards Board voted in favor of new standards that require goodwill be tested for impairment on an annual basis instead of amortized. And plenty of senior financial executives have been taking a wait and see approach to the new rules.However, ...

By Craig Schneider • June 29, 2001

How to Survive the SEC’s Second Guessing

Some senior financial executives may get more than they bargained for with the adoption of new accounting standards for goodwill and intangible assets in business combinations. Amid the switch from amortization of goodwill to a complex impairment test exists what some experts see as a breeding gr...

By Craig Schneider • June 29, 2001

Pre-Paid Legal Announces Results of Appeal to SEC

Pre-Paid Legal Services Inc. received a letter from the Securities and Exchange Commission saying the company’s accounting policy for commission advance receivables does not conform to generally accepted accounting principles, reports Dow Jones Newswires.The SEC said the company should amend its ...

By CFO Editorial Staff • June 28, 2001

SEC Investigation of Cellstar Concluded

CellStar Corp. said the Securities and Exchange Commission ended its investigation of the company “with no enforcement action recommended,” according to Dow Jones Newswires.Separately, CellStar said it plans to restate results for fiscal 2000, mostly because of understated accounts payable and co...

By CFO Editorial Staff • June 28, 2001

U.S., Allies Reach Deal on Tax Havens

The U.S. and its economic allies will announce agreement Thursday on a less aggressive approach for dealing with offshore tax havens, reports the Wall Street Journal.After the Bush administration attacked the international crackdown as a disguised attempt to boost global tax rates, the 30-nation ...

By CFO Editorial Staff • June 28, 2001