Journal of Accountancy

A monthly publication of the American Institute of Certified Public Accountants focusing on the latest news and developments related to the field of accounting, and written for CPAs and other accounting professionals.

Articles from Vol. 180, No. 3, September

Accountant Is Not a Fiduciary under ERISA
Afederal court in Rhode Island held that an accountant who recommended an investment to an employee benefit plan was not a "fiduciary" under the Employee Retirement Income Security Act. The accountant had recommended an investment in a mortgage company...
A Worksheet for Accounting for Deferred Taxes
Accounting for deferred income taxes, as prescribed by Financial Accounting Standards Board Statement no. 109, Accounting for Income Taxes, can be a complex process. To simplify the procedures CPAs must perform, this article introduces a deferred tax...
Comments Sought on EDs concerning Environmental Remediation, Mortgage Loans and Ethics
The AICPA has issued exposure drafts on environmental remediation liabilities, mortgage loans and ethics and is calling for comments on each. Environmental remediation liabilities The accounting standards executive committee (AcSEC) has issued an exposure...
Complying with Global Transfer Pricing Rules
The intercompany transfer pricing guidelines provided in regulations under Internal Revenue Code section 482 allow corporations with cross-border transactions increased flexibility when determining intercompany pricing methodologies. In July 1994, the...
Court Rules for Employees in Termination from CPA Firm
The U.S. Court of Appeals for the Eleventh Circuit ruled that an employer who discharges employees for exercising their rights under the Fair Labor Standards Act may be subject to an action for back pay and job reinstatement. This case began in the...
Employers Slow to Respond to Voluntary IRS 403(b) Plan Compliance Program
Lack of compliance with Internal Revenue Code section 403(b) is a major concern for the Internal Revenue Service in the area of employee benefits, according to James J. McGovern, assistant commissioner for employee plans and exempt organizations. He...
Environmental Remediation Liabilities
Companies have long faced uncertainty as to when and how environmental remediation (clean-up) liabilities should be reflected on their balance sheets. To fill this void, the American Institute of CPAs accounting standards executive committee issued an...
From the Tax Adviser: Rollover IRAs and Estate Planning
Most people think of individual retirement accounts as simple investments, limited to small amounts and restricted to a small group. Most believe IRAs are uncomplicated investments, with investments and deductions limited to only $2,000 each year, and...
GASB's Financial Reporting Model - a Decade in the Making
Since its inception on June 14, 1984, the Governmental Accounting Standards Board has devoted a considerable amount of its efforts to reexamining the financial reporting model for government entities. The reporting model project was intended to address...
Home Office Pros and Cons Checklist
Accountants don't have to rent offices--they can create them in their own homes. Note the advantages and disadvantages to the home office option, and consider your particular situation and personality in deciding what's best for you. ADVANTAGES * Savings....
House Introduces Legislation to Modify S Corporation Regulations
A bill was introduced in the House that would ease regulations governing S corporations. HR 2039, sponsored by E. Clay Shaw (R-Fla.), is designed to expand access to capital as well as protect the ability to leave closely held businesses to heirs. In...
Implementing FASB 116 and 117
Not-for-profit organizations (NPOs) face some crucial decisions. Financial Accounting Standards Board Statement no. 116, Accounting for Contributions Received and Contributions Made, and no. 117, Financial Statements of Not-for-Profit Organizations,...
Independent Contractor or Employee?
Small businesses use concultants to perform tasks that traditionally were done by employees in order to reduce overhead costs and simplify their bookkeeping. Also, in recent years, companies have laid off employees only to re-engage them as consultants...
Marketing Services to Not-for-Profits
Many not-for-profits are turning to their CPAs for assistance beyond auditing, financial accounting and filing form 990, providing CPA firms with great client service opportunities. NPOs need CPAs' expertise when accounting for fund-raising and compliance...
Senate Testimony Endorses Home Office Deduction Changes
Witnesses before the Senate Subcommittee on Taxation and Internal Revenue Service Oversight have supported the liberalization of home office deduction regulations. The Home Office Deduction Act of 1995, a bill sponsored by Senator Orrin Hatch (R-Utah),...
Small Business Tax Solutions
Q. Much attention has been paid to the DuPont--Seagram transaction, including the proposed legislation that followed. What planning opportunities did this transaction raise for closely held businesses? A. In the DuPont--Seagram transaction, Seagram...
Supreme Court Says Age Discrimination Damages Are Taxable
The U.S. Supreme Court recently said liquidated damages stemming from an age discrimination claim filed under the Age Discrimination in Employment Act (ADEA) are not tax-free. Schleier, an airline pilot, was fired because he reached age 60. He brought...
The Endowment Goose and Its Golden Eggs
Remember Aesop's fable about the magic goose that laid golden eggs? The more eggs the goose laid, the richer the owners became. Unfortunately, they didn't think they were getting rich fast enough--they wanted all of the gold immediately. So they cut...
The Injured Spouse Rule
Ataxpayer's refund can be used to pay all or part of his or her spouse's past-due income taxes, other federal debts or arrears for child or spousal support payments. The spouse not obligated for the debt may be considered an injured spouse under Internal...
The Not-for-Profits Toolbox
In many ways, a not-for-profit organization (NPO) is similar to a commercial business: It must track debits and credits and generate cash-flow analyses. Additionally it must conduct myriad other examinations. And as accountants for NPOs know only too...
The SEC Intends to Streamline Corporate Disclosure Documents
The Securities and Exchange Commission has issued a proposal that would allow companies to use an abbreviated financial statement in annual reports delivered to shareholders. Companies would still be required to file full financial statements with the...
Workload Compression Reaches House Hearing
Robert L. Israeloff, chair of the American Institute of CPAs board of directors, told members of the House Ways and Means Committee that the workload compression problem for CPAs was "the equivalent of scaling Mount Everest the first four months of the...
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