The CPA Journal

The CPA Journal is a monthly refereed accounting journal. It has been published by the New York State Society of CPAs since 1930.Subjects for The CPA Journal inlcude accountants and accounting. Carolyn Morrisroe is the managing editor and Anthony H. Sarmiento is a contributing editor.

Articles from Vol. 64, No. 7, July

Accounting for Impaired Loans under SFAS No. 114
In May of 1993, the FASB issued Statement No. 114, Accounting by Creditors for Impairment of a Loan, that is intended to minimize inconsistencies in lenders' accounting for, and measurement of, loan losses. The provisions of Statement No. 114 apply to...
Author's Success Yields Estate Taxable Asset
In a case of first impression, the Tax Court has held that the name of the late immensely successful novelist V.C. Andrews constituted an asset in Ms. Andrews' estate.Andrews created the "children-in-jeopardy" genre of literature, which has become very...
Basis Adjustments for Liquidation Payments to Retiring and Deceased Partners
The IRS ruled in Rev. Rul. 93-13, 1993-7 I.R.B. 12 (2/16/93), with respect to the special basis adjustment available to a partnership under IRC Sec. 734(b) in connection with certain deferred liquidation payments to a retiring partner or a deceased partner's...
Choosing the Best Software
Your first decision was to computerize your firm. That was the easy part. You then did your homework...read articles, product reviews, and advertisements and requested product literature from various vendors. You thought you knew what you were looking...
Compilations, Reviews and Audits: The Skills Required Relative to Public Confidence
Reliable financial information in the form of financial statements is an essential ingredient to the functioning of today's society. In the commercial sector, investors and other owners, suppliers, and creditors need the information to evaluate the viability,...
Controversial New Partnership Anti-Abuse Regulations Proposed
On May 17, Treasury issued proposed anti-abuse regulations under IRC Sec. 701 If finalized in their current form, these regulations will empower IRS to disregard the form of one or more transactions whenever partnerships are used to substantially reduce...
Derivative Financial Instruments: Time for Better Disclosure
Derivative financial instruments, puts, calls, futures, et al, are in the news and people are concerned. The FASB has issued an exposure draft that proposes additional disclosures for these financial instruments in financial statements for this year...
Empowerment Zones, Enterprise Communities, and Rural Development Investment Areas
In a move to stimulate economic growth in distressed communities in urban and rural America, RRA '93 under IRC Secs. 1391 through 1397D created empowerment zones, enterprise communities, and rural development areas.Special tax incentives will be provided...
Ethical Reasoning in Confidentiality Decisions
CPA acquires confidential client information during the course of audits and other attest functions, tax return preparations, and consulting engagements. Is there ever a higher duty that allows a CPA to breach the rule of confidentiality? According to...
How to Avoid Penalties for Transfer Pricing Violations
Many related parties transfer goods or services between or among themselves. Challenges by the IRS to the prices underlying such transactions may lead to transfer price adjustments (TPAs). TPAs may, in turn, lead to the assessment of penalties--calculated...
IRS/entertainment Industry Agree on Worker Classification Guidelines
IRS recently published an industry-specific audit guide to be used by its agents when determining the proper classification of workers as employees or independent contractors. The TV commercial production and professional video communications industry...
Managing Working Capital in an Improving Economy
In an improving economy, financial managers may encounter serious pressures on working capital while taking advantage of the perceived potential for increased profits. For example, in order to take advantage of a growth environment, keeping each of the...
Overcoming the Statute of Limitations
IRC Secs. 1311 through 1315 allow a taxpayer or the IRS to reopen the statute of limitations in certain circumstances. The intent of these mitigation provisions is to provide a statutory remedy for the party who is adversely affected by a double deduction...
Predatory Pricing Can Be a Self Destructive Act
Offering a prospective client a low, competitive" bid--maybe even lower than your direct costs--in many instances can involve a very sound business strategy or tactic. Some of the more obvious considerations might include-* gaining market share in a...
Promotion Opportunities for Internal Auditors
Many companies' internal audit departments expect staff members to transfer to other financial positions after a few years in the audit department. Providing long-term career opportunities helps attract high quality people to the audit department, which...
Protecting the Financial System from Derivative Risk
In May 1994, the U.S. General Accounting Office (GAO) issued a report, Financial Derivatives--Actions Needed to Protect the Financial System (The Report). GAO's objectives for studying the complex world of derivatives were to determine-* what risks derivatives...
Public Accounting - No Longer a Profession?
There was a time when the practice of public accountancy was referred to as the accounting profession. In his book, Ethical Standards of the Accounting Profession, John L. Carey, long-time Executive Secretary of the AICPA wrote, "One way of avoiding...
Real Estate after RRA '93
The rules relating to real estate have been liberalized for tax years beginning after 1993 as a result of RRA '93.Since 1987, rental real estate has, by definition, been a passive activity regardless of the taxpayer's level of participation. Expenses...
Recklessness in Securities Law Claims
In an important decision in the Leslie Fay Companies, Inc. securities litigation, Judge Conner has apparently scrapped the last vestiges of protection from the Hochfelder case--at least in cases involving large-scale fraud on the part of the company....
Settlement Agreements: Debts vs. Bequests
A claim against a decedent's estate, based on an asserted right to inherit, was not deductible in Estate of Elizabeth G. Huntington v. Commissioner, 1993 TC No. 19.While creditors' claims that are enforceable, personal obligations of a decedent are deductible...
Status of Recommendations by GAO on Tax Policy Issues
The GAO recently issued an annual report on tax policy and administration entitled 1993 Annual Report on GAO's Tax Related Work. It represents a summary of GAO recommendations made in 1993 in this area. It is addressed to the appropriate chairmen of...
Study Focuses on Saving the American Dream
Merrill Lynch & Co., Inc. recently sponsored a study focused on the American Dream--a quintessentially American ideal that each generation will do better than the one before--its health today and its prospects for tomorrow. The study involved a combination...
The Predictable Aspect of Mutual Funds: Fees
The increasingly competitive mutual fund marketplace has spawned a host of pricing alternatives and fees that can confuse even those who are most familiar with mutual funds. Mutual funds are highly regulated and disclosure of all fees is required. But...
The Single Class of Stock Rules: A Fair Approach
Final regulations under IRC Sec. 1361(b)(1)(D) address the single class of stock requirements of an S corporation. Reg. Secs. 1.1361-1 is generally effective for taxable years beginning on or after May 28, 1992, but do not apply to instruments, obligations,...
Use of the Credit Shelter Trust to Reduce Estate Taxes
They say the only sure things in this world are death and taxes, but what they forget to tell you is that even after death there is still taxes. The objectives of any estate plan should allow the client to use and enjoy his or her property during his...
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