The issue of dividends and dividend policy is of great significance to owners of closely held and family businesses and deserves considered attention.  This highly informative blog is excerpted from Z. Christopher Mercer’s (founder and chief executive officer of Mercer Capital) newest book: Unlocking Private Company Wealth. To read the full article in Mercer Capital's Financial Reporting Blog, click: An Int ...

Shift Your Investment Effort How much should a high-growth firm invest in marketing? What techniques or investments pay off more—traditional or social marketing? What should a high-growth marketing firm expect from these investments? How do results differ from firms that are not growing? How do high-growth firms differ from other firms? In this article, Dr. Frederiksen answers these and other questions. ...

Visualized Financial Statement Analysis The use of Excel and graphics, commonly referred to as data visualization, can provide a fuller or more holistic view of changes in an entity. Does the traditional audit or report that is devoid of data visualization serve the client? In this article, the author “propos[es] not a replacement for ratios…but rather that financial statement analysis should return to a mo ...

The Case of Trademarks and Brands Since the adoption of fair value accounting governed by SFAS 141 (in 2001) and IFRS 3 (in 2004), hundreds of thousands of different intangible assets have been valued, audited, and reported in financial statements of public companies all over the world. After fifteen years of fair value accounting, the debate about the accuracy of such values and their relevance for readers ...

Digital Security: Apple, Taxes, and Terrorism The FBI has attempted to compel Apple, Inc. to defeat its own encryption.  Because Apple has thus far refused, a federal court in California will hear arguments.  The case is certain to have far-reaching implications for the nature of digital security.  Adam Junkroski, lead manager Tax Communications for AICPA, explains how the unbreakable encryption at the cent ...

The Many Tax Benefits of Making Charitable Contributions With IRA Distributions Now that the provision permitting these contributions is permanent, taxpayers can take maximum advantage of this rule, even using life insurance to increase the gift to charity.  David K. Smucker, CPA, Advanced Consulting Group director with Nationwide Insurance, explains that the recent legislation making the $100,000 charitabl ...

The presence of an unrecognized device attempting to access your Google account could be a serious threat.  J. Carlton Collins, JofA contributing editor, recommends you remove the unknown device and change your password immediately. To read the full article in the Journal of Accountancy, click: Cybersecurity: Unknown Google Device. ...

The FASB announced sweeping changes to the accounting for leases earlier this year that will affect nearly all financial statement issuers.  Travis W Harms, Mercer Capital’s Financial Reporting Valuation Group lead, discusses each topic. To read the full article in Mercer Capital's Financial Reporting Blog, click: 7 Things to Know About the New Lease Accounting Rules. This article is republished from Mercer ...

A Taxpayer Loss—Assets Included in the Estate We find ourselves in a familiar place once again—that is, analyzing a case in which the IRS attacked an FLP under I.R.C. § 2036. Just two months ago, I wrote an overview of Estate of Purdue v. Commissioner, (T.C. Memo 2015-249), in which the IRS attacked a closely-held asset holding company, in that case it was an LLC, under I.R.C. §2036. While both holding comp ...

Nuances Valuing and Normalizing an Auto Dealership There are many reasons an auto dealership may require a business valuation; buy-sell agreements, shareholder disputes, employee stock ownership plans (ESOPs), and estate planning and gifting strategies. In many instances, there will be an opposing party that questions the validity of the final value, whether it be a dissenting stockholder or the Internal Re ...

When it Comes to Messaging, You Can Have too Much of a Good Thing Real-time messaging can be a lifeline—and a huge distraction.  Barb Darrow discusses how many companies are embracing internal communication platforms, but the result can be employees using several simultaneously, according to a survey. To read the full article in Fortune, click: When Good Communication Goes Bad. ...

Following FASB’s issuance of its new leases standard, the first step in compliance for many companies is an evaluation of whether they possess all the data they need to report under the new rules.  Ken Tysiac, editorial director of JofA, explores four key considerations recommended for companies as they work to comply with the new leases standard. To read the full article in the Journal of Accountancy, clic ...

When to Report COD Income Because Form 1099-C, Cancellation of Debt, is often issued either before or after the debt was discharged for tax purposes, practitioners need to understand the recognition rules to be able to advise clients when and if to report the COD income.  Victoria R. Bartlett, shareholder with Gregory, Sharer & Stuart CPAs, explains that issuance of Form 1099-C does not necessarily requ ...

For management teams working through a bankruptcy, there are a number of valuation-related considerations.  Samantha L. Albert, senior financial analyst with Mercer Capital, explains five key concepts for management teams and their advisors to be familiar with when embarking upon a Chapter 11 reorganization. To read the full article in Mercer Capital's Financial Reporting Blog, click: 5 Things to Know About ...

The Danger of Not Considering Other Potential Sources of Harm To recover lost profits in commercial damages litigation, three standards must be met: proximate cause, foreseeability, reasonable certainty. While all three are important, proximate cause does not always receive a great deal of consideration among experts. Although the question of causation is generally left to the trier-of-fact, financial exper ...

Are We Heading Towards the Next Financial Crisis? (Part II of II) In this second part of the two-part article, the author, a valuation professional and trained economist, shares his thoughts on whether we are headed towards another financial crisis. Here, he shares his views on the size of the U.S. debt, low interest rates and whether the low interest environment is sustainable, and what he sees are solutio ...

Retirement Savings Require Prioritization of Financial Goals Saving for retirement requires balancing several different objectives such as paying down debt, setting aside enough money to handle emergencies, and making contributions to retirement accounts.  Brian Preston and Bo Hanson discuss that how you prioritize these goals will depend on your personal financial situation. To read the full article in U.S ...

Here are the IRS's Top "Dirty Dozen" Tax Scams for 2016 The Internal Revenue Service released its annual list of the "dirty dozen" worst tax scams, starting with identity theft and winding up with frivolous tax arguments.  Sally P. Schreiber, senior editor of JofA, lists what taxpayers and practitioners need to watch out for. To read the full article in the Journal of Accountancy, click: 2016’s Dirty Dozen ...

How Delaying Retirement One Year Provides Financial Advantages Working just one additional year before retirement can increase your Social Security benefits and provide other financial advantages.  Emily Brandon, senior editor for Retirement at U.S. News, discusses this and that an additional year also means continuing to receive company benefits instead of paying for them yourself. To read the full article ...

With the rise of technology and professional service firms, the U.S. marketplace is shifting from one which supplies goods to one which supplies ideas.  Taryn E. Burgess, financial analyst with Mercer Capital, explains there is a growing gap in the balance sheet reflecting this shift from physical assets to intangible ideas. To read the full article in Mercer Capital's Financial Reporting Blog, click: Our E ...