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. 172, No. 6, December

A Checklist for Management Discussion and Analysis
A CHECKLIST FOR MANAGEMENT DISCUSSION AND ANALYSIS Management discussion and analysis (MD&A) recently has experienced increased attention as a result of actions by the Securities and Exchange Commission. The SEC published Financial...
A Guide to Updating Telecommunications; How to Get Ready for Phone and Data Systems in the Office of the Future
Talk's not cheap. And with telecommunications technology becoming more sophisticated and critical to the success of a business, managers must focus more on finding economical ways to get the best equipment to meet their growing communications needs....
AICPA Supports Amortization Bill, with "Necessary Changes."
The American Institute of CPAs gave its support, subject to several changes, to legislation aimed at eliminating conflicts between the Internal Revenue Service and businesses over amortization of intangible assets. (For a description of the bill's...
A Threat to Business Valuation Practices; New Laws at the State and Federal Levels Could Prevent CPAs from Offering Some Services
CPA's ability to provide services in a growing practice area may be hampered by rules and regulations in the making. The performance of business valuations--a service many firms have long offered alone or as part of a variety of engagements--could...
Breaking Up Is Hard to Do
When marriages break up nowadays it is not only the marital partnership that is affected. Often there are business partnerships (or other entities) that must be divided between the husband and wife. The problem is especially troublesome when a closely...
Economic Outlook Cloudy
Economic prognosticators speaking at the Conference Board's annual business outlook conference saw little to be optimistic about, at least in the immediate future. Gail Fosler, chief aconomist at the Conference Board, expects economic growth to...
FDIC Case against Ernst & Young Dismissed
A federal court in Texas dismissed the Federal Deposit Insurance Corporation's $560 million claim against Ernst & Young, which arose from the failure of Western Savings Association. Ernst audited Western in 1984 and 1985; in 1986, the thrift was...
Finance Sub Treated as Conduit
In a significant extension of revenue ruling 84-152, the IRS held in a letter ruling that a foreign-owned offshore finance subsidiary, established in a worldwide financial center, constitutes a conduit for U.S. withholding tax purposes. Interest paid...
Getting the Picture on Document Image Management; New Technology Will Affect Many Areas of a CPA's Work
A picture may be worth a thousand words. But what do you do when you have a thousand or more pictures--images of paper documents--and you want to conveniently store, retrieve and copy them? This article examines the new optical image storage technology...
Grant Thornton Allowed Indemnity Claim against FDIC
A federal court in Kansas ruled that Grant Thornton, the auditors of a failed savings and loan, was entitled to indemnity, or a 100% shift in liability from Grant to the FDIC as receiver of the failed institution. Grant audited the financial statements...
How to Find and Keep the Best Employees in the 21st Century; It's Time to Remodel Corporate Benefits to Meet the Needs of Tomorrow's Work Force
In 1929, a few years before Social Security was launched, benefits made up less than 1% of a worker's wages and usually were limited to a short vacation. In fact, until the early 1960s benefits were so financially insignificant they were called "fringe...
Impairment of Oil and Gas Properties; Is a Ceiling Test Needed for Successful Efforts Companies?
The accounting profession is devoting considerable attention to the financial reporting problems of the impairment of long-lived assets. Because of inconsistencies in practice and lack of authoritative guidance, in December 1990 the Financial Accounting...
Letters of Credit for Sale-Leaseback Transactions
LETTERS OF CREDIT FOR SALE-LEASEBACK TRANSACTIONS This month's column discusses a recent consensus reached by the Financial Accounting Standards Board emerging issues task force (EITF or task force) concerning letters of credit issued...
Municipal Lease-Purchase Obligations: A Different Kind of Tax-Free Investment
The capital markets are constantly introducing a wide array of new investment vehicles. It's important for practitioners to keep up with these changes so they can advise their clients appropriately. This month, Lance L. Dominique, director of municipal...
Selecting the Best Partner Compensation Method; Pay Should Be Structured to Achieve a Firm's Goals
The issue of how partners should be compensated--and for what services or efforts--can cause contention at CPA firms. Disagreement frequently erupts along these lines: FOUNDING PARTNER: "I started this firm with one $200 client and worked very...
The Fundamentals of Sales and Use Taxes; States Are Turning to Sales and Use Taxes to Meet Growing Revenue Needs
For many years, sales and use taxes were the poor country cousins of the federal income tax. The taxes seemed simple enough; even the forms appeared relatively unsophisticated--no run-on sentences or allusions to obscure code sections. And if the...
The New AICPA Chairman: A Goodwill Ambassador for the Profession; Gerald A. Polansky; We Should Be Proud of Our Profession and What We Do
There is no mistaking Gerald A. Polansky's pride in his profession. He expressed it early in a recent Journal interview: "We have an excellent profession with a good reputation. Go out into the communities around the country and you'll find the stature...
Third Circuit Reverses Newark Morning Ledger
How to amortize acquired intangible assets has become the principal tax issue of 1991. It is ironic that legislation was recently proposed to standardize amortization practices in response to IRS court defeats. But before the ink had dried on the...
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