September 2011 archive

Goodwill Impairment Tests Become Easier

The Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2011-08, entitled “Testing Goodwill for Impairment”. This amends guidance in Generally Accepted Accounting Principles (GAAP) Topic 350 involving goodwill and other intangible assets. Because early adoption is allowed, and the new guidance simplifies significantly the current procedures, expect the new guidance to be widely implemented …

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New Mortgage Limits

On October 1, 2011, Fannie Mae and Freddie Mac will reduce the size of mortgages it purchases.  The new lower limit will be $625,500, down from the current $729,750.  For most of the United States, this should be no big deal.  However, in some pricey places, this change can really hurt borrowers.  Limits are set …

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Surprising Survey Covering SEC Whistleblower Program

Accounting and consulting firm BDO USA, LLP conducted an August 2011 annual national telephone survey entitled “The 2011 BDO Board Survey”. Interviewers spoke directly to 101 board members for public companies with revenues ranging from $250 million to $750 million. Although the survey covered other corporate governance matters, this post involves required whistleblower reporting systems. …

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30,000 Tax Cheats Confess Under IRS Programs

The IRS has created two disclosure programs where approximately 30,000 tax cheats have come clean.  The IRS has created these voluntary disclosure programs in a larger effort to identify and pursue U.S. taxpayers who avoid paying taxes by hiding assets in overseas accounts.  Efforts by the IRS began in 2009, after Swiss bank UBS AG agreed to …

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$535 million U.S. Loan to Solyndra was predicted to be a failure

Solyndra was a manufacture of solar cells based in Freemont California. In August & September 2011, Solyndra ceased all business activity, filed for Chapter 11 bankruptcy, and laid off all employees. The federal government is Solyndra’s largest creditor, having made the company a $535 million loan guarantee. The interesting thing about this loan is not …

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Report Identifies Top Undergraduate Business Programs

US News and World Report has unveiled its current listing of the top colleges, including various subcategories such as Best Undergraduate Business Programs.  The top five include three public universities and are as follows: University of Pennsylvania Massachusetts Institute of Technology University of California – Berkley University of Michigan – Ann Arbor University of Virginia New York University, …

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Law Firms May Face Tax Increase with New Small Business Definition

In August, the Treasury Department released a report that redefines what constitutes a small business.  Previously, pass-through entities were often used as a proxy for being a small business.  The Treasury study limits the number of small businesses by: 1.  Claiming that any business with over $10 million of gross revenues or  deductions is not …

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In Lieu of Flowers…Social Security Sends $$

There is significant and valid concern over the government’s ongoing ability to maintain Social Security payment commitments.  Given these issues, one might reasonably expect the Social Security Administration to safeguard the existing assets.  Guess again. The Social Security inspector general estimates that $40 million was paid out to deceased beneficiaries.  These erroneous payments did not …

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Baby Boomers Not Planning to Leave Much Behind

According to a recent survey of millionaire baby boomers by investment firm US Trust, many are making a surprising decision regarding their financial planning.  Rather than planning to leave behind a sizeable estate, they intend to substantially exhaust their funds prior to death.  Less than half of those surveyed said leaving money to their children was …

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PCAOB Reopens Auditor Rotation Issue

On August 16, 2011, the Public Accounting and Oversight Board (“PCAOB” – the regulator of auditors of publicly-traded companies) issued a concept release that reopens the idea that auditors of publicly traded companies should be forced to rotate/drop their clients after some lengthy period, such as ten years.  This would dramatically change the auditing business …

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