Monday, November 23, 2009

A Guide to Tax Allocation with iGAAP

CCH and the Grant Thornton CPA firm have combined to produce the IFRS Tax Manager, which is designed to help accounting professional handle auditors and accounting and tax professionals to understanding the impact that IFRS and convergence will have on financial reporting and taxation (an obvious example: income tax allocation). The complete text of IAS 12, 34 and 37 are included; additionally, Grant Thornton developed a list of 60 "frequently asked" questions related to the tax impact of IFRS convergence.

Congratulations to CCH and Grant Thornton on this project. Interperiod tax allocation is tricky enough with the more familiar U. S. GAAP; who knows (save possibly Grant Thornton) what new tax allocation issues will come with convergence.

NOTE: This is likely to be my last post this week. Happy Thanksgiving to all my readers.

Wednesday, November 18, 2009

A Famed Political Blogger Considers Dave Ramsey and Financial Peace

Well-known political blogger Meg McArdle (Asymmetric Information, guest blogger at Instapundit) takes a trial of Dave Ramsey's Financial Peace with her fiance and writes about the experience at Atlantic magazine. McArdle found that she was more careful with her spending when she left credit cards behind (not to mention the strange looks which she got when she paid in cash at a boutique). She points out that this "Grandma" plan had not so much found wanting as found difficult in a financially more flush time. She ended the experience impressed by the sense of empowerment that she felt, though acknowledging that having education and car purchases in the past made the Ramsey plan much easier.

McArdle is onto something when she says that the "Ramsey/Grandma" plan was abandoned more for inconvenience than failure to accomplish its purpose. We live in a society which has little interest or use in delayed gratification; as such, we make it very hard for younger people and those from low-income backgrounds to learn the lessons they need to thrive in their financial lives during the best years of their physical lives.

Tuesday, November 17, 2009

Brazen Biofuel Bilk--Another Ponzi Scheme Pollutes the Investment Environment

The Securities and Exchange Commission has charged Mantria Investment, Speed of Wealth LLC, Wayne and Donna McKelvy, Troy Wragg and Amanda Knorr with investment fraud in the marketing of a "green" residential community in rural Tennessee and a "biochar" charcoal substitute. According to the SEC, the defendants (Mantria, Speed, the McKelvys, etc.) actually were running a Ponzi scheme with virtually no actual revenue and no return to investors except perhaps a share of receipts from later investors. The defendants primarily targeted elderly individuals through seminars and "webinars." The SEC seeks an asset freeze, injunctions and financial penalties.

Preying on the money of elderly people with little ability to earn enough to make up losses is only marginally less despicable than molesting children. Should the SEC charges hold up in court, we can only hope that the courts will show little mercy to the defendants.

Saturday, November 14, 2009

Twelve Blog Update: New Blogs Added

Couple of new developments towards the upcoming Twelve Blogs of Christmas season. First of all, note that all members of the "Twelve Blogs" (except personal finance) now are in bold with date of acceptance (e.g. 05: awarded Twelve Blog status in 2005) as an additional way to honor these blogs. The personal finance blogs will likely get similar status at some future time when my life is less intense. Additionally, several blogs, including pfblogs in Personal Finance and Tax Info Blog in Tax, have gone dormant and need to be replaced. Additionally, in the Accounting area, the Accounting Web Bloggers Crew has been moved to this category (leaving two personal finance blogs to be replaced) and Neil Mc Intyre's fine Canadian blog, reactivated this past spring, has been reinstituted as a "Twelve Blog." This means four additional Accounting blogs will be selected for "Twelve Blog" status next month. While there is no plans to name new personal finance blogs until 2010, two blogs had to be named to substitute for the Accounting Web blog shift and the dormancy of pfblogs. Chosen here were two worthy candidates which just missed last year: "Two Pennies Earned" and "Wisdom from Wenchypoo's Mental Basket." Note now that ALL personal finance blogs linked at right are Twelve Blog awardees. To replace "Tax Info Blog," "Tax Policy Blog," the libertarian-oriented blog by the Tax Foundation which almost was awarded Twelve Blog status last year, was an obvious choice as a substitute. Six additional tax blogs will be chosen in December.

Congratulations to the Accounting Web Bloggers Crew, Neil Mc Intyre, Tax Policy Blog, Two Pennies Earned and Wisdom from Wenchypoo's Mental Basket--and keep up the good posting.

P. S. Bruce, the Missouri taxguy, has moved from Blogspot to his own blogging website. The blogroll at right should have his new address/URL.

Obama Contemplates Using an Emergency Brake on Spending

The Obama administration signaled to federal agencies that spending freezes and even actual cuts (not just "cuts" from the current services budget) are possible for the upcoming year. The impedus for action comes from numerous sources: expressed concerns from Asian nations, belief that record deficits imperil Democratic congressional prospects in 2010 and the effect that independent voters had in Republican governorship races in NJ and VA earlier this month. Budget director Peter Orszag indicated that such spending proposals might have to be modified with the present momentum towards recovery stalls; additionally, budget limits would need to be combined with added revenues.

Give Team Obama some credit of potentially finally getting the message of the early month elections, though I have to be somewhat of a doubting Thomas on whether Nancy Pelosi, Harry Reid, etc. would go along with such a strategy. Right now, we will call this a possible small victory for the Tea Partiers.

Wednesday, November 11, 2009

No IRS VITA "Seed" Money for ACORN

The Internal Revenue Service recently awarded about $8,000,000 in matching grants for its Volunteer Income Tax Assistance Program and the controversial community group ACORN was not among the receipents. ACORN was recently embarrassed by amateur videos of its activities subsequently shown on conservative outlets such as the Big Government website and Hannity's Fox News show. Among the almost 150 groups which did receive VITA funding were the Bay Area (CA) United Way and AARP.

I am somewhat puzzled as to why taxpayers are providing $8 million for a VOLUNTEER activity in the first place. Having said that, ACORN certainly must be a less worthy recipient that those who did receive awards.

Sunday, November 08, 2009

Coming Soon! The Fifth Year of "Twelve Blogs of Christmas"

During December, I have given recognition to accounting and tax blogs which were not recognized in previous years (once a "Twelve Blog", always a "Twelve Blog" unless a blog goes dormant). Blogs honored range from "CPA Firm Technology Blog" and "Roth CPA Updates" in 2005 to "Skeptical Accountant" and "Missouri taxguy" last year. In previous years, I also have cited personal finance blogs--since I am making fewer personal finance posts (about 3-4 in 2009), I am going to honoring personal finance bloggers in only even numbered years--thus this year I will honor six accounting blogs and six tax blogs. Time table will be as follows: in mid-November I will cite two or three blogs (these blogs fully count as "Twelve Blogs" and include worthy blogs in past years such as CPA Trendlines) which will substitute for prior awardees which went dormant this year; in late November I will reveal nominees and in early December I will announce the blogs for 2009. If you wish to nominate your blog or another blog, do so by the end of the week and I will consider but not guarantee its inclusion.

Saturday, November 07, 2009

New Links Up!

About 10 new links added today, a mixture of news, accounting blog and tax blog links. Thanks to Michelle Golden, Joe Kristan and Rick Telberg, whose updated link lists provided the sources for the new links. The tougher job of eliminating outdated links will come soon enough.

UPDATE: Added one or two new links, subtracted about eight, and moved URL/changed blog name on three or four others. To the best of my ability, I believe that the blogroll is as up-to-date as I am capable of making it.

Thursday, November 05, 2009

If You File (Personal Income) Taxes for a Living, You MUST File Electronically

  • Trish McIntire

  • Both houses of Congress passed a law extending unemployment benefits today, and as part of an amendment to the bill, tax language was included requiring tax preparers expecting to file more than 10 individual returns to file returns through e-file. The amendment also extended the homebuyers credit past the end of this month and extended the five-year NOL carryback to other than small businesses.

    Last Thursday, I weighed on the homebuyer credit; no reason to comment further today on that. Regarding e-file requirements, while the libertarian in me objects to this type of rule, I suspect that in practice the massive majority of people preparing tax returns for a living were already e-filing. I do not have a strong opinion on the NOL carryback; guess this might help some companies who were profitable before last fall's recession get money back from the government faster.

    Tuesday, November 03, 2009

    SOX Lite? SAS 99, Legal Liability and Risk Management

    Gary Zeune, top speaker on white-collar crime issues, gives a primer on fraud alertness, detection and how to proceed if fraud appears to be a legitimate possibility. One reason for his concern, SAS 99, imposes many requirements on private-held businesses and state and local governments that Sarbanes-Oxley imposed on publicly-held major corporations. Among the steps in his 17-step action plan are: make sure that audit program is clearly adjusted for SAS 99, consider added use of surprise audit procedures, make sure to perform EVERY procedure which "should" be performed, GAAP and GAAS compliance do not make an audit lawsuit-proof, the learning curve on SAS 99 is steep, ALL management frauds including those under $100 are material, check marketing materials to assure that the perception of independence is not compromised by those materials, watch out for management overrides even for companies with good internal control and make sure that EVERY member of the team understands the goal of the audit and the importance of the antifraud provisions of SAS 99.

    Zeune has done an important service not only for auditors but for auditing teachers with this article. Clearly, internal control and fraud detection and prevention have become even more important than before.

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