Akron Business Consultants

Accounting and Tax Ramifications of Issuing Stock Options

 Click here to view Part 1 of our series and learn more about the stock option landscape.

To give you more perspective, first let us review the accounting treatment for the issuance of stock options (rest easy - this will not be too painful). When stock options are issued, an expense must be recorded based on the value of the option. A stock option’s value is derived from a variety of factors, two of which are the value of the stock as of...

When selling your home, it is common to use an agent to list, promote and show the property. In exchange, you pay a portion of the sales price as a commission to the agent. The benefits of using an agent include: 1) the listing of your home in a database so that homebuyers can access information about it; 2) the agent acting as your middleman during the negotiation process; and 3) the incentive it gives the agent to sell your home quickly (so that her or she can earn their commission). 

Some peop...

You've heard about it on the radio; you've read about it in various newspapers.  The Issue 1 bond renewal, which funds the Ohio Third Frontier (OTF) program, will be on the state-wide ballot on May 4.  Some facts and figures since OTF's inception in 2002:

• 570 new companies created
• Over 300 projects state-wide
• 48,000 direct and indirect jobs created; goal of 96,000 jobs over the OTF period
• Estimated $6.6 billion in economic impact
• $2.4 billion in wages and benefits to Ohioans
• Over 65% increase in...

If you asked my Grandpa what the rate of return on his investments is, he would probably scratch his head and say, “Huh?” The only return that he knows (even though he doesn’t necessarily understand it) is the .5% that he earns on his savings account with the local bank. If you asked my Dad the same question, he might say that he earns a few percentage points per year. His investments are being allocated in a more conservative fashion as he nears retirement. In my case, most of my retirement...

There are many tales behind the origin of the phrase “rule of thumb”, some of which are more realistic than others. The story that is the most widely accepted is that woodworkers used to use the width of their thumb, rather than rulers, for quick measurements.  Regardless of how the phrase got its start, a rule of thumb is considered to be an imprecise, yet convenient measurement standard. Relying solely on a rule of thumb to value a business, however, can lead to unreliable...

When you think of a crystal ball, what types of people come to mind? Prophets? Magicians? Shady fortune tellers? While all of these people are associated with the act of attempting to predict the future using a crystal ball, there is another group of people who still today rely on their figurative crystal balls whether they know it or not: business owners.

Every day, business owners must make estimates and guesses about the future of their companies with the intent to position themselves to take...

As a kid, baseball and football trading cards were my life. I would absorb the stats on the back of each card and rattle them off at school like it was a homework assignment. I have boxes and boxes of cards that I accumulated over the years, as I am sure that may of you do (if your mom hasn’t tried to throw them away yet). What do baseball cards have to do with the value of your business? More than you think.

Magazines such as Tuff Stuff and Beckett quote estimated prices for nearly every sports...

As I surfed around on the internet the other night searching for Black Friday deals (who goes to stores nowadays, anyway?), I couldn’t help but wonder – how can companies sell products at just a fraction of previously listed prices?  The answer isn’t terribly complicated.  Retailers cut prices to increase interest in products and fan the flame of pent up consumer demand.  This concept, coupled with most businesses being closed on this day, results in stores being flooded with consumers on the...

It's like a game of hide and seek for wealthy Americans.  In 2001, the Internal Revenue Service estimated that Americans owed $345 billion more in tax than they paid, or about 14% of federal revenues from fiscal year 2001.  Where were these tax dollars hiding?  The U.S. government is betting a good portion is hiding in the Swiss Alps. 

In an unprecedented move, the Swiss Justice Department agreed to disclose the names of 4,450 UBS account-holders from 2001 to 2008 that contained more than...

Home-Buyer Tax Credit Seekers May be in for a Long Wait

If you’re one of the many people who are planning to or already took advantage of the home-buyer tax credit, you may be in for a long wait to actually receive your refund. Why is this?

According to this article by MarketWatch, the main reason is fraud. The article states that the IRS handed out $620 million to ineligible filers. The result? Every request for the credit is now being audited leading to long delays for those claiming the...

In today’s economy, it is crucial to keep good tenants. The following nine points will help you maintain maximum occupancy in an uncertain environment:

1. Understand the tenant’s business. Research their industry so you can credibly talk about their business, and make them feel that you understand their concerns in today's economic conditions. 
2. Respond reasonably to rent relief or downsizing. This entails a two-step process consisting of listening to the request, and then formulating a personal...

‘Tis the season… Whether it was Monte Kiffin of the famed “Tampa 2” defense or Buddy Ryan of the ’85 Bears, NFL defensive coordinators have strived to invent new ways to confuse opposing quarterbacks. Typically they utilize a “base” defensive formation and build upon it by constructing complicated blitzing schemes. While these blitzing schemes are often complex, the “base” defense still must be considered by the opponent. 

Within the valuation arena, much like blitzing schemes,...

Due to the unprecedented economic conditions of the past year and a half, many companies had to take a challenging look at whether their goodwill was impaired during their last audit or review. For those companies that did not record any impairment of goodwill in 2008, continued economic pressures in 2009 may make avoiding impairment two years in a row a difficult proposition. 

In the whirlwind of goodwill impairment discussions, however, impairment testing for other intangible assets seems to...

With the crash of the real estate market some are looking to capitalize and purchase larger homes for a bargain price. In doing so, they face the problem of selling their current residence to make the move up. With the lack of buyer interest and with some people not willing to take such a large loss people are holding out for the market to rebound. This creates the problem of carrying two mortgages, which the monthly payments on two mortgages can create cash flow problems for many taxpayers in...

If you have purchased, constructed or invested in real estate in the last few years, you may have heard the term “Cost Segregation Study.” Although the overall concept of a cost segregation study has existed for awhile, it is still not widely utilized, nor is it completely understood how it can enhance cash flow and bet the cornerstone of a property owner’s overall tax plan.

To learn how you can take advantage of a cost segregation study, click here to read our article from the latest issue of...

Many of us probably remember Harvey Dent, aka “Two-Face,” from our childhoods as one of Batman’s arch enemies. He looked like a normal guy from one perspective, but from the other side, he was a bizarre-looking villain. While normalizing adjustments in business valuation may not be quite as exciting as watching Batman battle Two-Face, they bear a similarity to this comic book character.

The results of many companies as reported in financial statements or tax returns do not always reflect...

While the likely adoption International Financial Reporting Standards (IFRS) is a hot topic for accountants, many privately-held small and medium-sized business owners may not be aware of the potential changes on the horizon for financial reporting. The general consensus is that in the coming years, the U.S. will move to adopt IFRS in place of Generally Accepted Accounting Principles (GAAP) as the governing standards for financial reporting, although no official date for conversion has been set...

Building Information Modeling, or BIM, has been around for decades but has caught the attention of the construction industry in the last several years and is continuing to pick up momentum for good reason.  Implementing BIM has helped contractors streamline their job costing which is one of the most important activities performed by those working in the construction industry.  Some contractors are spending as much as 50% of their time doing so and it has been estimated that, in 2009, project...

What did Picasso’s paintings look like when he was only halfway finished? How did Michelangelo’s “David” look like after the first few chisels? How livable is a house after the frame has been erected, but no interior work has been done?

A valid answer to all of the preceding questions is, “Something different than the final product.” However, for financial experts who provide opinions on economic damages and other litigated matters involving calculated figures, current rules sometimes allow for...