The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) each published an exposure draft (ED) containing joint proposals to improve and align the accounting for business combinations ( www.iasb.org/current/ed.asp ; www.fasb.org/draft ). The proposals retain the current requirement in both International Financial Reporting Standard 3 and
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TOPICS
Tax
Tax Software Makes the Grade
ax practitioners had reason to celebrate this year: Their software, as assessed in the annual Journal of Accountancy survey of tax-preparation software, performed better than it did last year. Adding to the joy, they’re no longer threatened with the possible need to convert to a new software package to replace
Management
The Institute released AICPA Audit Committee Toolkit: Not-for-Profit Organizations and AICPA Audit Committee Toolkit: Government Organizations, which are comprehensive sets of best practices for, among other things, understanding internal controls, conducting meetings with company executives and making the audit committee charter a tool for managing committee responsibilities and documenting performance.
Government Accounting
The Federal Accounting Standards Advisory Board (FASAB) published Statement of Federal Financial Accounting Standards (SFFAS) no. 29, Heritage Assets and Stewardship Land ( www.fasab.gov/pdffiles/sffas_29.pdf ). The standard reclassifies information on these assets and land as basic information, with the exception of condition information, which it classifies as required supplementary information.
Differentiating Debt From Equity
A tax deduction is permitted for interest paid on business indebtedness. When a closely held corporation borrows money from its shareholders, the loans must be examined carefully to determine whether the transfer is a bona fide loan or a disguised capital contribution. The economics of the transfer must be examined
Money Laundering
The Federal Financial Institutions Examinations Council (FFIEC) released the Bank Secrecy Act (BSA)/Anti-Money Laundering Examination Manual to ensure consistent application of the act to commercial banks, savings associations and credit unions ( www.fdic.gov/news ). In it the FFIEC prescribes uniform principles, standards and report forms for federal banking regulators. The
Wheels Deals
Source: IRS, www.irs.gov .
“Divorce, Pensions and Community Property”
The Internal Revenue Code has relatively clear rules detailing the taxation of normal payments made on account of divorce. How these rules apply to pension plan distributions has been explained in several court cases. Recently, the Tax Court had to determine the taxation of a payment in divorce that was
Employee Benefits
The Institute endorsed the SIMPLE Cafeteria Plan Act of 2005 (S. 723), a bill that would allow small businesses to provide nontaxable benefits, such as flexible spending accounts, to their employees ( http://thomas.loc.gov ) as large companies and government agencies now do. In addition, the proposed legislation would allow cafeteria
“Uncle Sam, Pay Up”
Source: The Merrill Lynch New Retirement Survey of 3,448 baby boomers, Merrill Lynch, New York, www.ml.com , 2004.
Reduced Exclusion Possible in Home Sale
n today’s hot housing market, many taxpayers are selling their residences and moving. The tax code aids this endeavor: Under IRC section 121(a) and (b), taxpayers can exclude up to $250,000 of the gain on the sale or exchange of a home ($500,000 for certain joint returns) if they (1)
An Honest Nation
Source: Tax Planning and the Affluent Investor and 2004 Affluent Investor, Spectrem Group, Chicago, www.spectrem.com , 2005.
FYI
President George W. Bush designated Cynthia A. Glassman as acting SEC chairman until the Senate confirms a successor to William H. Donaldson, who stepped down in June. The president has nominated Rep. Christopher Cox (R-Calif.) to replace Donaldson. The Financial Accounting Foundation named Keith L. Johnson, CPA, chairman of the
International
The International Accounting Standards Board issued an amendment to the fair value option in International Accounting Standard (IAS) 39, Financial Instruments: Recognition and Measurement. In response to regulators’ concerns that the option provision in the 2003 revisions of IAS 39 might be misused, the IASB limited its application to financial
When to Write Off Bad Debt
Determining whether a debt has become worthless always is a question of fact which requires consideration of all pertinent evidence—including the debtor’s financial condition and the value of any security for the debt. A recent Tax Court decision focused on some key factors in making such a determination. Maurice E.
Tax Benefits of Royalty Trusts
oyalty trusts provide income-oriented taxpayers with opportunities to invest in natural resources, realize cash flows and participate in the tax benefits afforded this specialized industry. To educate interested clients, CPAs should familiarize themselves with this type of investment. WHAT ARE THEY? Corporations owning natural resources create royalty trusts to raise
New Horizons: Enterprise-Wide Compliance
EXECUTIVE SUMMARY COMPLYING WITH SARBANES-OXLEY HAS LED many companies to search for a better way to manage all the regulatory demands they face. Some are doing so on an enterprise-wide basis by coordinating and integrating compliance into all facets of their business. COMPANIES NEED A FRAMEWORK TO HELP them manage
Uncle Sam Raises the Limit
Source: IRS, www.irs.gov .
Work Longer for Uncle Sam
Source: Tax Foundation, www.taxfoundation.org , May 2004.
Government Accounting
The Governmental Accounting Standards Board (GASB) added a volume to its User Guide series for nonaccountants. What Else You Should Know about a Government’s Finances: A Guide to Notes to the Financial Statements and Supporting Information explains how to assess a state or local government’s financial health and is available
Features
FROM THIS MONTH'S ISSUE
4 ways solo practitioners can stand out
Five years ago, a grieving Angel Zhen started his own CPA firm with no clients and no revenue. Today, he has 300 clients, $600,000 in revenue and 12 weeks of annual vacation. In this JofA article, he shares how he set up his firm and how you could do the same.
From The Tax Adviser
April 30, 2026
Current developments in taxation of individuals: Part 2
April 30, 2026
