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Tax

Financial Reporting

The Institute, in cooperation with industry experts, has updated and revised illustrative financial statements for banks, savings institutions, credit unions and mortgage companies (in separate versions), which members can find online at www.aicpa.org/members/div/acctstd/illustrative_fs.asp . These illustrative statements also are available in the AICPA publication, Checklists and Illustrative Financial Statements for

FYI

The board of trustees of the Financial Accounting Foundation (FAF) appoints Robert H. Attmore chairman of the Governmental Accounting Standards Board (GASB). He succeeds Tom L. Allen, who served as GASB chairman since 1995. Attmore is president of Attmore & Associates, Albany, New York, a consulting firm serving government agencies

International

The International Accounting Standards Board (IASB) publishes an exposure draft, ED 6, Exploration for and Evaluation of Mineral Resources, which proposes guidance for extractive-industry entities required to comply with international financial reporting standards (IFRS) beginning in 2005 ( www.iasb.org/uploaded_files/ ). Because there is no related guidance in place and the

Accounting

  For news from the AICPA and state societies, visit www.cpa2biz.com , which also offers online CPE, AICPA professional literature, practice management aids and links to state society Web sites.   The AICPA accounting standards executive committee (AcSEC) issues Statement of Position (SOP) 03-3, Accounting for Certain Loans or Debt

Corporate Acquisition Expenses

TAX CASE The deductibility of an expenditure can greatly affect the benefit a taxpayer receives from it. When evaluating the acquisition of another business, the issue becomes not only whether the expenditure is deductible rather than capitalizable but also whether it will reduce taxable income at all. Recently, the Tax

Gross Income Includes Returned Fees; Advance Litigation Costs Are Loans

TAX CASE IRC section 61 defines gross income as all income from all sources—unless specifically excluded by law. In general a taxpayer must include in gross income any increase in wealth he or she realizes in the period “realization” occurs. The claim of right doctrine says realization takes place whenever

Privacy

The Federal Deposit Insurance Corp. requests comments on a proposed rule it issued in conjunction with the Federal Reserve Board, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration, the Securities and Exchange Commission, the Federal Trade Commission and the Commodities

A Pioneer Is Gone

OBITUARYMilton Wilson—Texas’s first African American CPA—died in October. Licensed in 1952, he also was among the nation’s first 100 African American CPAs. During the civil rights era, Wilson was one of the first seven African Americans to earn a doctoral degree in accounting. According to A White-Collar Profession: African American

Technology

XBRL International, a global consortium of more than 200 accounting, technology and financial service organizations, releases version 2.1 of extensible business reporting language (XBRL), a protocol for electronic financial reporting ( www.xbrl.org/newsandevents/index.asp?sid=4 ). The new implementation will make it easier for software developers to create XBRL tools that work without

Government Accounting

GASB issues a proposed Technical Bulletin, Tobacco Settlement Recognition and Financial Reporting Entity Issues, which addresses accounting treatment by state or local governments in connection with settlements made by U.S. tobacco companies ( www.gasb.org/exp/tb2003-b.pdf ). The proposal also clarifies asset and revenue recognition guidance for such transactions by the settling

QTIP Created Under State Law Not Federally Binding

TAX BRIEF Under IRC section 2056(a), an estate may claim a marital deduction for property passing to the surviving spouse. As a general rule, the law denies a deduction for “terminal interests” (those that will terminate or fail “on the lapse of time, on the occurrence of an event or

Professional Issues

The AICPA professional issues task force issues Practice Alert 2003-3, Acceptance and Continuance of Clients and Engagements, to give practitioners and their firms guidance on establishing policies and procedures for deciding whether to accept or continue a client relationship and whether to perform a specific engagement for that client (

Audit Initiative Targets Executive Compensation

ccording to an IRS webcast, the service has begun an initiative to assess compliance and target abuses related to executive compensation and benefits. CPAs who represent public companies should become familiar with this initiative. AREAS OF INTEREST The IRS selected 24 sample companies from five industry groups to gather compliance

Financial Reporting

The SEC issues an interpretive release, Commission Guidance Regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations ( www.sec.gov/rules/interp/33-8350.htm ). Commonly called MD&A, such information is included in public companies’ disclosure documents. The guidance emphasizes the MD&A should not be merely a recitation of financial statements in

Auditing

The Department of Labor’s Employee Benefits Security Administration (EBSA) released a series of questions and answers about audit waiver requirements under its October 2000 Small Pension Plan Security Amendments. The publication ( www.dol.gov/ebsa/faqs/faq_auditwaiver.html ) explains how small pension plans can determine whether they qualify for an audit waiver under the

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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.

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