August 2016 Article Archives

Sales and Use Tax Audit Sampling

Published on August 12, 2016

Business taxpayers sometimes face surprisingly large sales and use tax audit assessments when the tax or taxable amount is projected from seemingly small and infrequent errors in the auditor's sample. Depending on how the sample is designed and weighted, large audit assessments can either reasonably reflect the taxpayer's actual facts or unintentionally be in error due to the sampling methodology itself. Many taxpayers are not equipped to evaluate the appropriateness of a jurisdiction's methodologies and projections and do not know whether or how to challenge them.

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The Hidden Costs of a Data Breach

Published on August 12, 2016

Much of the business discussion around cyber-security relates to protection of key assets such as customer information and intellectual property, often after the news that another company has suffered a large data breach. While strengthening defenses against cyber-attackers is important, companies also must be prepared to handle the reputational and financial hits that a cyber incident can produce for years down the road.

Cyber-security has the attention of CFOs and other decision-makers. And for good reason: The average cost of a data breach has risen 29% since 2013, to about $4 million per incident, according to an annual report from IBM and Ponemon Institute. And a 2015 survey of US finance decision-makers shows that organizations are increasing spending on cyber-security.

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Cost Segregation Recapture Tax

Published on August 12, 2016

Cost Segregation Recapture Tax

Here are some ways to lower any depreciation recapture when disposing of a property. Savvy tax professionals who recommend cost-segregation studies are well aware of the recapture tax rules that require taxpayers to pay back any tax deductions for accelerated depreciation when the property is sold. After all, in the right situation, the net present value of those tax savings far exceeds any recapture tax payback. While the effects of a cost-segregation study can magnify recapture issues, tax professionals should consider a number of worthwhile opportunities to reduce or avoid recapture tax that is realized upon sale of property.

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FASB proposes concepts for financial statement presentation

Published on August 12, 2016

FASB issued a proposal that would establish a set of concepts for how recognized items should be presented in a financial statement.

The exposure draft issued by FASB is designed for provide a foundation for the board as it creates future accounting standards, with a goal of enhancing financial statement users’ ability to assess prospects for future cash flows by addressing how to: 

The proposal, Concepts Statement 8—Conceptual Framework for Financial Reporting: Chapter 7: Presentation, is part of FASB’s larger project to create a new conceptual framework, which also would address concepts related to measurement and disclosure.

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FASB proposes changing income tax disclosure requirements

Published on August 12, 2016

FASB proposed accounting rules Tuesday that would change disclosure requirements for income taxes on organizations' financial statements.

Under the proposal, existing disclosure requirements would change and organizations would be required to provide new disclosures. The proposal would require preparers to: 

Additional disclosures also would be required, with differentiation between requirements for public business entities and other organizations. The proposal is titled Proposed Accounting Standards Update, Income Taxes (Topic 740), Disclosure Framework—Changes to the Disclosure Requirements for Income Taxes.

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What should FASB work on next?

Published on August 12, 2016

FASB is asking for public comment on which financial accounting and reporting topics it should consider adding to its agenda.

The board issued an Invitation to Comment document that explains areas of concern that were identified in a recent survey of FASB’s advisory groups.

After completing major projects in recent years on standards such as revenue recognition, leases, and credit impairment, FASB is seeking input on other areas of accounting and financial reporting that need improvement.

The Invitation to Comment covers areas of concern identified in a recent survey of FASB’s advisory groups. The document discusses potential issues and possible solutions in the following areas: 

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