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1. Assessing the Allowance for Doubtful Accounts   CPEDirect

BY MARK E. RILEY, CPA, PH.D., WILLIAM R. PASEWARK, CPA, PH.D.
Calculating estimates of the collectibility of accounts receivable and auditing those estimates is difficult. This article describes three techniques for assessing allowance for doubtful accounts estimates and complying with Statement on Auditing Standards (SAS) no. 57 and AU section 342, Auditing Accounting Estimates, which suggest auditors compare prior accounting estimates with subsequent results to evaluate the reliability of the process used to develop estimates.

2. Forecasting Post-Combination Earnings  

BY Michael S. Devine
The acquisition method of financial accounting for business combinations under FASB Statement no. 141(R), Business Combinations, requires the acquiring company to recognize and measure all identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquired company as of the acquisition date at their respective fair values.

3. Managing Customer Profitability  

BY Marc J. Epstein, Michael Friedl and Kristi Yuthas
All people may be created equal, but the same can’t be said for customers. Everyone knows that some customers are more profitable than others. Conversely, some are downright unprofitable. Knowing which is which is the allimportant question. Despite enormous variations in profitability, many companies continue unprofitable relationships with customers, often providing them with pricing and service levels identical to those received by the most profitable ones.

4. States Bite Into Broken Gift Cards  

BY Charles Owen Kile Jr., Patricia S. Wall
At the peak of the 2008 holiday shopping season, gift card sales are expected to again have a material impact on the financial reports of many retailers. Gift card “breakage,” or the portion of gift card balances that consumers fail to redeem for merchandise, can boost a retailer’s shortterm cash flows.

5. Post-Transaction Adjustments  

BY Alan Shapiro, Luis Coronado, Axel Nientimp
More and more, global companies are discovering that yearend adjustments to intercompany transfer pricing can improve the accuracy of their transfer pricing tax reporting and, potentially, help prevent overpaying taxes by millions of dollars. However, increasing scrutiny by tax authorities in the United States and other key countries makes it imperative that businesses make these adjustments in the right way at the right time and with proper documentation.

6. Tools for Financial Analysis  

BY James Estes, Richard S. Savich, Maya Ivanova
What do you do when a client asks you to look beyond the standard financial statements and help develop financial goals, forecasts and whatif scenarios? If you’re like many accountants, you’d hunker down with a spreadsheet and begin cobbling together an array of custom worksheets. Then you’d probably spend several more hours explaining to the company’s managers, most of whom have little or no financial background, what all those numbers mean.
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