Accounting & Auditing

Captive insurance companies are often owned by a large sophisticated financial entity, because there are minimum net worth and other regulatory requirements.  In many cases, the regulatory authority will accept a letter of credit in lieu of an actual cash investment for the initial capital requirements of the captive.  This results in “GAAP exception” financial reporting but is perfectly acceptable to the regulator.

Normally, single sponsor captives are wholly-owned subsidiaries and are included...

Despite the recommendations from the Blue Ribbon Panel on Standard Setting for Private Companies and the call from thousands of private companies across the country, the Financial Accounting Foundation (FAF) has decided that there should not be separate accounting standards for privately held businesses and publicly traded companies.

It was the recommendation of the Blue Ribbon Panel (and the hope of small businesses across the country) that a separate independent standard-setting board would be...

This quarterly Not-For-Profit Standard includes the following articles:

• Buyer Beware Alternative Investment Compliance and Tax Issues
• State Tax Liability for all Alternative Investments
• Nonprofit Board Members Paid or Volunteer
• Incentives and Disincentives for Contributions
• Issues in Charitable Giving
• FASB ASU 2011-04 and its Effects on Nonprofit Organizations
• 2011 OMB Circular A-133 Compliance Supplement Issued
• IRS Targeting Fringe Benefits for Intermediate Sanctions
• Gifts of Property and Forms...

In 2010, the Securities and Exchange Commission (SEC) continued to address the causes of the 2008-2009 financial crisis and devoted much of its attention to:

• Auditor Reporting on Internal Control Over Financial Reporting
• Proposed Short -Term Borrowings Disclosures
• Deciding Whether to Incorporate IFRS into U.S. Financial Reporting
• Liquidity and Capital Resources in MD&A
• Non-GAAP Measures
• Loss Contingency Disclosures
• Potential Long-Lived Asset and Goodwill Impairment

Click here for more information on audi...

The Financial Accounting Standards Board (FASB) issued a proposal in August that could dramatically change the nature of accounting for operating leases.

It’s part of an effort to conform U.S. accounting standards to international rules. It is in response to criticism that U.S. accounting doesn’t currently record a liability for operating lease obligations, although a company could be obligated to fulfill a lease for the next few years. If it is an operating lease, there is currently no asset or...

At the recent “BioOhio Annual Conference: Innovation Road Show,” Susan Pucie of the NHLBI discussed the SBIR and STTR eligibility requirements. Below is an overview of the STTR eligibility requirements (click here for an overview of SBIR eligibility requirements):

3 Phase Program for STTR (grants only)

Phase 1 - Feasibility Study

• Average award period – 1 year
• Average costs - $100,000 

Phase 2 - Research and Development

• Average award period - 2 years
• Average costs - $750,000 
• (Fast Track - Combines...

I am a CPA attempting to take a walk in the shoes of a scientist/business owner. So when I recently attended the “BioOhio Annual Conference: Innovation Road Show” to learn more about the Biotech and Life Sciences industries, one of the areas of discussion that I found to be most beneficial was the SBIR and STTR eligibility requirements that was presented by Susan Pucie of the NHLBI.   I thought, here is something of value to my clients. An overview of the presentation that took place and the key...

Accounting for leases has been fairly well settled for the last 35 years. In August 2010, the Financial Accounting Standards Board issued a proposal that would dramatically change the accounting for operating leases, which is a significant source of financing for some business organizations.

The existing guidelines are probably the best example of the “bright-line,” rules-based way generally accepted accounting principles (“GAAP”) in the US have been set in the past. It took many revisions and...

On August 19, 2010, the International Accounting Standards Board (IASB) published a staff draft of an upcoming International Financial Reporting Standard (IFRS) on fair value measurement. The IASB draft is still subject to revision before the board issues a fair value measurement standard which will likely be identical to the Financial Accounting Standards Board (FASB) standard on fair value measurement.  FASB issued an exposure draft of its fair value measurement standard in June 2010.

The...

International Financial Reporting Standards (IFRS) exist as an alternative to U.S. generally accepted accounting principles (GAAP) as issued by the Financial Accounting Standards Board (FASB).  Designed to replace the “rules based” GAAP with a more principles based approach, FASB has been working with the international standard setters to conform and converge GAAP to IFRS.

The SEC has recently signaled their support for a switch to IFRS by 2015, so long as progress continues to be made in a...

On December 16, 2009, the Securities and Exchange Commission ("SEC") issued final regulations related to annual disclosure of executive compensation matters and corporate governance. These regulations, which are effective for proxy statements and annual reports filed after February 28, 2010, contain some significant changes from the proposals in this area that the SEC issued in July 2009. The final regulations focused on several areas, and this Tax Alert will briefly summarize the provisions of...