Kravis: No Better Time than Now to Be Making Investments” Private Equity International’s James Taylor reports that at an invitation-only event in Monaco, the KKR co-founder said that low interest rates and a lack of capital offer ‘enormous’ opportunities for private equity: Kolhberg Kravis Roberts co-founder Henry Kravis struck a bullish tone in a speech in Monaco this week, dismissing talk of a “hard landing” in Asia, suggesting that the American consumer was regaining confidence and highlighting the opportunities for the industry in light of the problems in the banking sector. “There’s probably no better time than now to…
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State Estate Tax Changes The Wills, Trusts, and Estates Prof Blog reports that the federal estate tax exemption was indexed for 2012, increasing the $5 million exemption to $5.12 million. Many of the twenty-three states, including Washington, D.C., that impose state estate taxes have also made changes for 2012. A list of state specific changes to estate taxes for 2012 and beyond is below: To keep up with inflation, North Carolina and Rhode Island increased their exemptions to $5.12 million and $892,865, respectively. Illinois increased its exemption from $2 million in 2011 to $3.5 million beginning January 1, 2012.…
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Three Practice Management Trends for 2012 For the third year, the MGMA has published the State of Medical Practice in MGMA Connexion. It’s an overview of issues and industry perspectives that will shape medical practice this year. The Association collected information from healthcare professionals about the ways in which EHRs increase revenue, as well as what affects your compensation and practice collections, among others. Here are three of the 12 practice management trends: 1. Collections vs. compensation: Setting matters Your practice’s ownership may directly affect your physicians’ pay. Collections for professional charges (i.e., patient visits, procedures) are higher in physician-owned…
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Book Review: Inside the Multi-Generational Family Business Family Business Review recently ran an interesting book review, by Jane Hilburt-Davis, of M.T. Green’s book Inside the Multi-Generational Family Business: 9 Symptoms of Generational Stack-Up and How to Cure Them. Writes Hilburt-Davis: Green introduces a new conceptual framework, the syndrome of “generational stack-up,” defining it as “the convergence of several generations as owners, managers, employees, and shareholders” working together. He maintains that “stack-up”—the clash of generational values and perspectives—is a big problem in general and for family businesses specifically. The reasons, he writes are (a) we’re living longer, (b) we’re working to an older…
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Practice Management Companies Look to ACOs for Growth Physician practice management companies are forging ahead with expansion plans into new areas of hospital-based medicine as they position themselves to participate in accountable care organizations and other aspects of health system reform, reports Victoria Stagg Elliott at American Medical News. The companies are not buying primary care and other outpatient practices right now, although they are expanding into areas of hospital-based medicine that have not traditionally been their focus. This is in part to improve their ability to reduce readmissions and receive bonuses for improving quality and decreasing costs within an…
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Small Firm Innovation Wins ABA Journal Most Popular Site in Legal Practice Management Category Small Firm Innovation, a blog dedicated to first person accounts of small firm success, won the ABA Journal’s Blawg100 competition for most popular blog in the Legal Practice Management (LPM) category. The ABA announcement reports: In the wake of the financial crisis and a rapidly shifting legal landscape, Small Firm Innovation launched in April of 2011 during the ABA’s legal technology showcase, ABA TECHSHOW. A resource by, and for, solo and small firm lawyers, the site focuses on two specific areas: the business side of running…
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Congress Could Pass Online Sales Tax Legislation This Year Are you used to buying stuff on Amazon.com and not paying tax? Lots of business owners are doing it too. And that might change. At Accounting Today, Roger Russell offers an update: The impact of the economic downturn has been felt particularly hard at the state level, with many states operating under a deficit. Since taxes based on income don’t produce as much revenue during a recession as they do during good economic times, transaction taxes, including sales and use tax, become even more important to a state’s ability to fund its…
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The Bankruptcy Files: A Big Start to 2012 At AM Law Daily, Brian Baxter reports: Signs that the economy is improving notwithstanding, the number and size of large corporate bankruptcies could double in 2012, according to a new Fitch Ratings report covered by CNNMoney. Fitch predicts that corporate bond defaults will hit 3 percent this year—more than double last year’s 1.4 percent and 2010’s 1.3 percent. Middle market companies valued between $200 million and $1 billion are at particular risk because of the difficulty they face in trying to refinance and restructure outside of court, according to the ratings agency.
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Normalization of Income: Where Business Valuation Meets Forensic Accounting At the Legal Intelligencer blog, Terry Silver explains that since buyers and sellers often have differing ideas of a business’ true fair market value, normalization is usually a required part of any M&A deal: The valuation of virtually every closely held business requires normalization adjustments. Although these adjustments may be made to either the balance sheet or the income statement, the most common normalization adjustments are imposed upon the income statement. The International Glossary of Business Valuations Terms defines “Normalized Earnings” as “the economic benefits adjusted for non-recurring, non-economic, or other…
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M&A Will Likely Pick Up in New Year An Ernst & Young survey indicates longer term appetite for deals has increased, reports Anthony Noto at Mergers & Acquisitions. Private equity firms are more confident in the worldwide economy, suggesting an increase in M&A activity for the New Year, according to a report Ernst & Young released Wednesday. In the longer term, the appetite for M&A increases as companies are less likely to feel inhibited by the volatile economy and political unrest in Washington DC, the survey said, with 68 percent of larger cap respondents believing credit availability is either stable…
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Study: Expert Witnesses Put Litigation at Risk with Wrong Benchmarks to Calculate Damages Marks Paneth & Shron reports that expert witnesses who rely on assumptions that overlook business reality often cause their testimony to be excluded on a Daubert challenge. Donald M. May, Ph.D., current director in the Litigation and Corporate Financial Advisory Group at Marks Paneth & Shron LLP, has published a commentary in the Marks Paneth & Shron Library examining the critical mistake expert witnesses often make . In the commentary, Dr. May discusses: Why benchmarking shouldn’t be a “one size fits all” approach The risks of relying…
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Visualizing the Middle Market The Middle Market not only accounts for a third of private sector GDP and jobs, but over the last four years it’s been leading the way in terms of viability, resilience and growth, according to a new study from GE Capital. When it comes to economic development and employment growth, people tend to focus on either small local businesses or large multi-national corporations. But what about the gap in the middle? To learn more, GE Capital partnered with The Ohio State University Fisher College of Business to conduct the largest-ever study of American mid-market businesses. A new…
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Lessons from a Dying Business Redbox has built a successful DVD kiosk business, but its days are numbered. Here’s why that’s not such a bad thing, report Karl Stark and Bill Stewart at Inc.com. You’re probably familiar with Redbox, owner of those DVD-rental kiosks that you see parked outside of just about every neighborhood grocery store or pharmacy. Redbox is an excellent example of how to create growth from a business that will ultimately die. All growing companies can benefit from thinking more like Redbox. Redbox has grown over the past decade by offering the convenience of DVD rentals…
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PwC Global Economic Crime Report: Cybercrime a Growing Threat A new PwC report calls cybercrime one of the top four economic crimes – just after asset misappropriation, accounting fraud, and bribery/corruption, according to recent reporting in AccountingWeb. What is cyber crime? The PwC report, which you can read here, defines it this way: For our survey questionnaire, we defined cybercrime as: ‘an economic crime committed using computers and the internet. It includes distributing viruses, illegally downloading files, phishing and pharming, and stealing personal information like bank account details. It’s only a cybercrime if a computer, or computers, and the internet…
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A First: Law Firm Finds New Life, Not Death, in Bankruptcy The Wall Street Journal’s Law Blog Jacqueline Palank reports: A South Florida law firm recently used bankruptcy to do something no one in the legal industry has done before: sell itself to another firm. Companies across corporate America, from Blockbuster to General Motors, have sought court protection while they try to sell continuing businesses to potential white knights. But until last week, law firms usually used bankruptcy to shut down. So the $7.8 million cash-and-debt sale of midsize law firm Ruden McClosky out of bankruptcy to fellow South Florida law firm Greenspoon Marder made…
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Tax Law Update Trusts and Estates Magazine’s David Handler offers a summary of significant IRS updates on a handful of important laws: Internal Revenue Service extends filing and payment deadlines for estates of decedents dying in 2010 — In Notice 2011-76 (Notice), the IRS provided relief for the estates of decedents dying in 2010 (2010 estates). The filing deadline for the Form 706, federal estate and generation-skipping transfer (GST) tax return for 2010 estates was originally Sept. 19. With the new deadline fast approaching, the IRS published this Notice on Sept. 13, providing relief for estates in several respects, including an automatic…
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Firehoses, Drinking Fountains, and Intrinsic Value CFA Magazine’sChristopher Wright recently spoke with four analysts about the challenges of identifying key share price drivers among the torrent of minutiae. The analysts cover a number of topics, and come from a variety of firms and industries. Here’s J.B. Groh, CFA, senior research analyst at D.A. Davidson in Lake Oswego, Oregon: [It is largely] about the importance of fundamentals over the longer term. Ultimately, the value of anything, whether it’s an investment property or a share of stock, comes down to cash flow, timing of the ash flow, growth, and risk. Of course,…
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IRS Begins Scheduling Tax Preparer Competency Tests The Internal Revenue Service is moving into the second phase of its tax preparer regulation initiative by beginning next week to schedule the first competency tests for tax preparers, reports Michel Cohn at Accounting Today. The IRS said Tuesday it is launching the new competency tests for Registered Tax Return Preparers as part of a larger initiative to increase its oversight of the tax prep industry. Last year, in the first phase of its efforts, the IRS required all paid tax return preparers to obtain a Preparer Tax Identification Number. Those tax return…
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When ‘Friending’ Becomes a Source of Start-Up Funds Social networking is pretty good for keeping abreast of far-flung friends. Could it work for entrepreneurs looking for investors? That’s the question Sarah E. Needleman and Angus Loten pose over at the Wall Street Journal Small Business blog. Critics say the idea is dangerous for investors, and even dicey for the entrepreneurs. Yet, it is gaining traction with small-business owners from the Bay Area to New York, who say they eagerly await an opportunity to sell stakes in their businesses through social networking—a process known as crowd funding. The House Financial Services committee last week…
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CPA Site Solutions Announces Social Media Marketing System CPA Practice Advisor recently reported that CPA Site Solutions, which develops and hosts web sites for accounting firms, has added social media features to update sites with accounting and finance tips via Twitter, Facebook, and LinkedIn. The Social Media Marketing System feature alleviates [the problem of accountants too busy to update their websites] by automatically posting financial and tax tips every week, straight from your accounting website to your LinkedIn, Twitter, and Facebook accounts. “You don’t have to lift a finger because it’s all automated,” says Brian O’Connell, President of CPA Site…