The Exit Planning Institute Opens Northeast Ohio Chapter The Exit Planning Institute (EPI), NACVA’s Exit Planning partner and issuer of the Certified Exit Planning Advisor (CEPA) credential, has opened a new chapter that will be serving the Cleveland and Akron region in Northeast Ohio. The chapter president will be Christopher M. Snider, a partner at Aspire Management in Cleveland. Christopher M. Snider, CEPA and Exit Planning Institute Northeast Ohio Chapter President The chapter currently has approximately 30 members. Its mission is to build collaboration among professional advisors in order to promote common business interests, develop educational events for business owners and…
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Which States are Poised for Job Growth? As the U.S. jobs market digs its way out of the recession, gains aren’t expected to be evenly distributed. But some of the hardest-hit regions may also see some of the best growth, according to a new analysis, writes Phil Izzo at the Wall Street Journal Real Time Economics blog. Forecasting firm IHS Global Insight looked at which states will have the strongest rates of expansion through 2017. Do your own research with an interactive graph: Visit this site and click on any state to find out its projected jobs growth rate in…
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Fraud and the Family Business: It’s Not So Unusual The dynamics of a family-owned business are like no other, writes Robert Rothbort at Accounting Today. There’s usually a great atmosphere of trust. But that can leave family businesses uniquely vulnerable to fraud. Here are some common schemes: • “Ghost” employees. The family member overseeing payroll creates “ghost” employees that do not exist and arranges for their paychecks to be direct deposited into their own bank account. • Inventory fraud. Family members with easy access to inventory steal it and then sell it themselves for profit. • Credit card abuse. Family members put…
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How to Pay Less in Taxes Norm Brodsky answers a reader’s question at Inc.: To begin with, [the reader] needs to start his planning process early enough to allow him to end the year with as little cash profit as possible. That’s the idea if you have a young company using cash-basis accounting. I gave him a hypothetical — and oversimplified — example, just so he’d have a general idea of how it works. Let’s suppose that you finished last year with $20,000 in cash. If you end this year with $50,000 (not including new capital you may have added during…
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FASB Proposes Changes in Investment Accounting Michael Cohen reports at Accounting Today: The Financial Accounting Standards Board has released two proposed accounting standards updates to clarify the criteria for investment company accounting and develop guidance for investment property accounting. The proposed update for investment company accounting stems from the efforts of FASB and the International Accounting Standards Board to develop consistent criteria for determining whether an entity is an investment company. Under U.S. GAAP, investment companies carry all of their investments at fair value, even if they hold a controlling interest in another company. The primary changes proposed by FASB relate to…
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Estate-Tax-Basis Form Still Not Available Arden Dale at the Wall Street Journal’s Financial Advisor blog: A Florida resident in her seventies lost her husband in early 2010. The couple had $8 million, but how much will remain after taxes is still a mystery. The key IRS form has yet to appear since last year’s estate tax law changes. Those changes have created a “practically unsolvable conundrum,” said Renee Kwok, president of TFC Financial Management in Boston, which manages roughly $600 million in assets. The firm handled all of the estate for the widow. Lawmakers gave 2010 estates a one-time choice…
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Chart: The Cost of Buying Small Business Companies Scott Shane at Small Business Trends reports: Many people think buying a business is expensive. But, actually, the typical private company sells at a low price. According to BIZCOMPS, Business Valuation’s data base of private company sales, the median price of the 12,022 companies sold since 1995 on which Business Valuation has data was $166,000, less than half of one year’s revenue. As the chart below shows, only 5.8 percent of private businesses sold for more than $1 million. Nearly two-thirds sold for less than $250,000. Why does it cost so little to…
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Dentist’s Employment Contract Kills Personal Goodwill Argument – Ninth Circuit Rules Peter J. Reilly on Forbes.com: Tax planners generally think that clients are well served by their thoroughness. I have little doubt that this is generally the case. Every once in a while, though, that little bit of extra work can be counterproductive. In the case of Dr. Howard the extra step, that a less thorough planner might have neglected was the employment contract between Dr. Howard, the dentist and the Howard Corporation of which he was the sole shareholder. The Howard Corporation was a C corporation and when…
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Small, midsize firms encourage employees to get specialized training to help in winning clients. So writes Eilene Zimmerman in Crain’s New York Business, where she mentions American Institute for Expert Witness Education (AIEWE) courses: Sareena Sawhney is a detective of sorts. As a certified forensic financial analyst, she exposes a hidden world of fraud and negligence by analyzing financial transactions and reconstructing accounting records. Ms. Sawhney, a certified fraud examiner, is a director in the litigation and corporate financial advisory services group at Marks Paneth & Shron in midtown Manhattan. She investigates fraud for corporate and nonprofit organizations and determines if and…
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A Rogue Employee Might be On Your Payroll, Too So writes Sarah E. Needleman at the Wall Street Journal Law Blog, where she points out that small businesses tend to be more vulnerable to fraud than large firms: If a business as established and well off as UBS can suffer at the hands of one bad apple, could the same can be true for any business, even a small firm? According to various media reports, an alleged trading scheme at the Swiss investment bank went undetected for three years before it was finally discovered last week that a 31-year-old trader was apparently…
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Jack Nicholson Takes Over E.U. Finance FT’s Alphaville Blog reprises an ECB press conference last week: Reporter: What is your answer to German people and economists who want the return of the DM? Trichet: You want answers? Reporter: I think the Germans are entitled. Trichet: You want answers? (SHOUTING) Reporter: Germans want the truth! (SHOUTING) Trichet: *You can’t handle the truth!* (SHOUTING) [pauses]… Trichet: Son, we live in a world that has prices, and those prices have to be guarded by men with bonds. Who’s gonna do it? You? You, Sylvia Wadhwa? I have a greater responsibility than you could possibly fathom. You weep for…
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Adjusting, More M.D.’s Add M.B.A. Under heavy pressure from government regulators and insurance companies, more and more physicians across the country are learning to think like entrepreneurs, reports Milt Freudenheim at the New York Times: “All physicians need some kind of business training,” she said. “For example, some physicians with large research grants don’t know how to manage the money.” As for the nation’s troubled health system, “we are not running the business side very well,” Dr. Chandler said. “Part of the problem is we don’t have physicians sufficiently involved. They have a fuller insight about what is needed.” “Cue…
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FASB Approves Standard to Simplify Testing Goodwill for Impairment The Financial Accounting Standards Board (FASB) approved a revised accounting standard intended to simplify how an entity tests goodwill for impairment. Per the FASB: “The Board’s decision today comes as a direct result of what we heard from private companies, which had expressed concerns about the cost and complexity of performing the goodwill impairment test,” states FASB member Daryl Buck. “The amendments approved by the Board address those concerns and will simplify the process for public and nonpublic entities alike.” The amendments will allow an entity to first assess qualitative factors…
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Study: A Quarter of LPs Plan to Increase Allocations An overwhelming majority of investors who responded to a recent survey planned to maintain or increase their allocations to private equity, with high fees and a lack of transparency dissuading the remainder from committing more capital to the asset class. Clare Burrows reports at Private Equity International: Only 2 percent of the 411 investors and consultants surveyed by fund administrator SEI plan to decrease their allocation to private equity in the next 12 months, with 26 percent planning to increase their exposure. In the first of three reports based on the…
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Stumped on How to Figure Discounts? The IRS Can Help. The Engineering/Valuation Program DLOM Team at the IRS has posted a job aid on the IRS site. The 112-page guide reviews definitions of marketability and discusses factors that influence it. The aid illuminates the distinctions between minority and controlling interests. It offers sample initial information document requests (IDRs). A large section of the document reviews various methods of factoring DLOM. These include benchmark approaches (restricted stock studies, pre-IPO studies, cost of flotation, and Mandelbaum factors), securities-based approaches (LEAPs, the Longstaff Study, the Chaffee Study, Bid-Ask Spread Method), analytical approaches (Wruck;…
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Apple’s ‘bogus’ patents will ‘strangle’ Android: Google So reports Asher Moses this month in The Advertiser: Google’s chief legal officer has launched a blistering attack on competitors, including Apple, for attempting to stifle innovation by using “bogus patents” to target Google’s Android partners including Samsung. David Drummond, who is also Google’s senior vice-president, wrote in an explosive blog post that the patent wars were pushing up the prices of Android smartphones and tablets. This was part of a “hostile, organised campaign” being waged by Apple, Microsoft and others to “strangle” Android, which Google provides free of charge. His remarks come…
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Magic, Sex, and Outer Space Goodwill is the established reputation of a business regarded as a quantifiable asset. Or of a person who’s part of that business: That’s why you often hear discussions about how to best separate personal goodwill from enterprise goodwill. But what if your personal goodwill was regarded so highly, in a contract, that you’d need to work for the new company that was buying you out for six years? And if you left, you’d have to give all the money back? James Altucher reminisces: In 2002 I framed a $200 check from a company called thestreet.com.…
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Dueling Documentaries You’ve maybe read about the pro-trial lawyer documentary out recently from HBO called “Hot Coffee” in The Atlantic. (The title “Hot Coffee” refers to the famed McDonalds case of a few years back, when a woman was awarded some $3M+ by a jury for overly-hot coffee spilled on her by McDonalds.) Now there’s “Injustice,” which asks, “What do you have to do to earn a billion dollars in lawyer’s fees?” Steve Forbes calls it a “Must-See.” The State Bar of Michigan notes the arrival of both on its blog: Trial lawyers feeling the love from the HBO documentary “Hot Coffee” might want…
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In Silicon Valley, a Culture Clash Sullies a Romance Steven M. Davidoff reports on the New York Times DealBook blog: Private equity has broken venture capital’s heart, and V.C. is not taking it well. The romance ended when Silver Lake, the private equity firm, agreed to sell Skype to Microsoft. Silver Lake is estimated to be pocketing more than $4 billion from the sale. This would normally be a joyous event for Skype’s employees as they too share the wealth. But it is nothing of the sort. The venture capital community appears to be up in arms…
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Medical Group Management Association (MGMA) Survey Reports Top Challenges MGMA members were asked to identify top management challenges, and the results of the 2011 survey are in: See what MGMA members had to say about the results in the July MGMA Connexion. Compare this year’s results with previous years. Read the story behind the numbers and see how challenges are ranked by applicability.