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. 200, No. 5, November

AICPA Agenda: Helping in Time of Need
"All of us at the AICPA share the deep sadness and concern the entire nation feels over the devastation caused by Hurricanes Katrina and Rita. Our hearts go out to the hundreds of thousands of Americans whose lives have been forever changed, including...
Auditing Interpretations
Auditing Interpretations of Statements on Auditing Standards (SASs) are Interpretive Publications pursuant to AU section 150, Generally Accepted Auditing Standards [of AICPA Professional Standards]. Interpretive Publications are recommendations on...
Audits That Keep Fraudsters Guessing
Scratch the surface of many audit plans and you'll find predictable elements that someone bent on fraud can anticipate and foil. That's why SAS no. 99, Consideration of Fraud in a Financial Statement Audit, requires auditors to incorporate elements...
Bankruptcy Reform Is Here: At One Time a Chapter 7 Filing Let Debtors off the Hook - No More
EXECUTIVE SUMMARY * CPAs NEED TO UNDERSTAND THE IMPACT of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 so they can advise clients how their relationships with or as debtors is altered. The two most important changes are the...
Conservation Easements
Do you have a client who's interested in protecting the environment as well as getting a tax break? Recently, the Tax Court considered the deductibility of a conservation easement to a charity. In 1988 Mr. and Mrs. Charles Glass purchased property...
Double-Teaming in Excel: Spreadsheets Now Can Solve Tougher Calculations
Creating a spreadsheet to calculate depreciation expenses for a single property class is a piece of cake for most accountants using Excel's LOOKUP function (see "Make Excel a Little Smarter," JofA, Jul.03, page 735. But many CPAs might scratch their...
Dyslexia Program Tuition Is a Valid Deduction: Special Education as a Medical Expense
In letter ruling 200521003, the IRS held that tuition paid to a school program to help dyslexic children deal with their condition was an IRC section 213(a) deductible medical expense. The ruling broadens--albeit slightly--the definition of the kinds...
Exposure Drafts Outstanding
(This list was compiled as of October 1, 2005. For exposure drafts issued after that date, consult The CPA Letter. Note: The policy for updating the list of exposure drafts is that a document should remain on the list until a final document has been...
Financial Management Web Site Opens: The AICPA Creates a Hub for Members in Business and Industry to Connect with Colleagues, Keep Current on Business Ideas and Access Tools and Research
The AICPA is committed to supporting its members in business and industry, and therefore, the Financial Management Center has been created with the needs of these members in mind. Financial executives' and financial managers' responsibilities are vast...
Five Facts about Your Credit
Things you should know to keep your credit rating healthy. 1 You have three credit reports. Each of the three national credit bureaus--Equifax, www.equifax.com; Experian, www.experian.com; and TransUnion, www.transunion.com--independently collects...
Get Your BV Niche out There: Referral Sources Are the Key to Building Business in This Fast-Growing Specialty
EXECUTIVE SUMMARY * CPAs WHO SEEK TO DEVELOP A BV NICHE should first determine the areas in which the firm can demonstrate expertise to referral sources. Prospects want to know that a firm understands their business. CPAs need technical training...
Make Excel Speak Faster
Q. A couple of years ago you described how to program Excel to read aloud the numbers in worksheets (JofA, Dec.03, page 89). That tip has saved me many hours of work. Can you help me get Excel's voice to speak faster so I can save even more time? ...
Medical Practices: A BV [R.Sub.X]: Using an Income Approach to Value Health Care Practices Gets the Best Results
EXECUTIVE SUMMARY * CPA/ABVs NEED TO BE AWARE that a market-data approach to valuing medical entities is easy to follow but may yield less meaningful data than an income approach. * INCOME-APPROACH METHODS include capitalization of cash flows...
No Marketability Discount for Lottery Winnings
The Massachusetts District Court held in Estate of Donovan v. United States that, for estate tax purposes, the value of a stream of lottery payments due to a decedent must be based on the annuity valuation tables in IRC section 7520 without a discount...
No Privacy in Bankruptcy: Data in the Public Record Are There for Anyone to See
EXECUTIVE SUMMARY * LAWS AND REGULATIONS PROHIBIT CPAs from disclosing clients' personal financial information, but bankruptcy statutes require that very same information to go into the public record. CPAs can't change the law, but they can help...
Not-for-Profits Get New Edition of Accounting Trends & Techniques: Fresh Views on Financial Statement Reporting and Disclosure Practices in New Publication
Special for the Journal of Accountancy The AICPA has released a new edition of Accounting Trends & Techniques--Not-for- Profit Organizations (product No. 006616, www.cpa2biz.com), part of a series of such publications which for over 55 years...
Pay Now or Defer: No Income Deferral If Services Are Involved
EXECUTIVE SUMMARY * THE DEFERRAL OF TRADE DISCOUNTS BY RETAILERS has caused the INS to closely police whether allowances contingent on services performed are really trade discounts. If a discount is strictly volume-related, receiving it in advance...
ShortOuts
* Excel: Press Ctrl+1 to engage the format menu in Excel. * Excel: To quickly select a full table of contiguous cells, place your cursor anywhere in the cells and press Ctrl+ Shift+8. To select a range of data, put the cursor in the first cell and...
Springboard for Searches
www.business.com In addition to listing the most popular user searches and an option to download a free version of its toolbar, this search engine and business directory provides news stories by industry--financial services, human resources and...
SSARS Interpretation
Interpretations are issued by the Accounting and Review Services Committee (ARSC) to provide guidance on the application of Statements on Standards for Accounting and Review Services (SSARSs). Interpretations are issued after all ARSC members have...
SSARS No. 12-Omnibus Statement on Standards for Accounting and Review Services-2005
(Amendment to Statement on Standards for Accounting and Review Services No. 1, Compilation and Review of Financial Statements, AICPA, Professional Standards, vol. 2, AR sec. 100.05-.10, 100.25, 100.33, 100.38, 100.49-.58, 100.61-.62, and 100.80; rescindment...
SSARS No. 13-Compilation of Specified Elements, Accounts, or Items of a Financial Statement
(AICPA, Professional Standards, vol. 2, AR sec. 110) (Rescindment of Interpretation No. 8, "Reports on Specified Elements, Accounts, or Items of a Financial Statement," of SSARS No. 1, Compilation and Review of Financial Statements, AICPA, Professional...
SSARS No. 14-Compilation of Pro Forma Financial Information
(AICPA, Professional Standards, vol. 2, AR sec. 120) 1. Statements on Standards for Accounting and Review Services (SSARS) currently provide guidance concerning the standards and procedures applicable when an accountant submits unaudited financial...
Statement of Federal Financial Accounting Standards No. 29-Heritage Assets and Stewardship Land
The Federal Accounting Standards Advisory Board (FASAB or "the Board") was established by the Secretary of the Treasury, the Director of the Office of Management and Budget (OMB), and the Comptroller General in October 1990. It is responsible for promulgating...
Statement of Federal Financial Accounting Standards No. 30-Inter-Entity Cost Implementation
(Amending SFFAS 4, Managerial Cost Accounting Standards and Concepts) The Federal Accounting Standards Advisory Board (FASAB or "the Board") was established by the Secretary of the Treasury, the Director of the Office of Management and Budget (OMB),...
The Future Has Never Looked Brighter: Three International Leaders Representing Accountants in Business and Industry Talk about the Profession
Where are we going, where have we been and how can we best reach our destination together? These are some of the subjects on the minds of the chief executives of the world's leading accounting organizations representing more than 335,000 members around...
The Last Word
I majored in accounting because I wanted to do something in business but didn't know what--and I figured an accounting degree would give me more options in whatever I chose to do. The best thing about public accounting is the chance to communicate...
The Virtues of Volunteering: Never Underestimate the Absolute Necessity of Trust
I was recruited to the American Red Cross by a former member of this council, Ron Pitman, who asked whether I'd chair an audit committee meeting at my local chapter. I didn't believe I had the time, but felt one meeting was doable. Well, we never can...
Valuing IP Post-Sarbanes-Oxley: It's No Longer a Matter of Making a Best Estimate
EXECUTIVE SUMMARY * ALTHOUGH SARBANES-OXLEY SETS NO SPECIFIC requirements for CPAs valuing intellectual property, it does put greater emphasis on accurate valuation of all assets and imposes punishments on CEOs and CFOs for failure to do so. ...
What Makes It Alimony?
When do family support payments constitute alimony? CPAs advising clients about their tax status in a divorce need to know the rules. Alimony payments are deductible for tax purposes for a payor spouse but represent gross income to the payee. Under...
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