Don't Let Clients Fall into This Social Security Tax Trap Social Security recipients may face disproportionately high tax rates because of the way the IRS calculates income with respect to Social Security.  So-called combined income includes adjusted gross income as well as tax-free income, half of Social Security income and some add-ons.  Paul Norr, certified financial planner with Bucks County Financial P ...

U.S. Dollar's Dominance Seen Compounding Global Debt Problem The biggest-ever burden of peacetime debt worldwide, paired with the U.S. dollar's sustained role as the dominant currency, is raising concern about what will happen when interest rates finally rise.  Mike Dolan explains that the main problem is that the dollar denominates that debt pile. To read the full article in Reuters, click: Why Being the K ...

Using Crowdsourcing to Perfect a Business Idea Some startup businesses are using crowdsourcing services to gather input from a large number of people and test their ideas and business strategies.  This can be a wise strategy, as the best ideas may come from outsiders, said Elizabeth Gerber of Northwestern University. To read the full article in The New York Times, click: Crowdsourcing to Get Ideas, and Perh ...

While observers appear to be increasingly worried about the proliferating use of non-GAAP measures, a useful debate on non-GAAP measures would probably focus on the nature of their presentation within various disclosures rather than whether or not they should be outlawed altogether.  Sujan Rajbhandary, vice president, senior member of Mercer Capital’s Financial Reporting Valuation Group, explains. To read t ...

Tips for Expert Witnesses (and Legal Counsel) from a Litigation Strategist Expert witnesses need to prepare, but what other factors may help the expert win-over the jury? Wendy Pearson, a seasoned litigation strategist, shares her views on this subject. ...

Studies in the Closely Held Company Valuation (Part II of II) In the first part of this two-part discussion, the author identified six transaction risk factors attempting to sell a controlling (including 100 percent) interest in a closely held company. Those included: 1) an uncertain time horizon to complete the offering or sale; 2) “Make ready” accounting, legal, and other costs to prepare for and execute ...

Why Clients Need to Discuss End-of-Life Care Baby boomers are at the forefront of the conversation around end-of-life planning, which should include discussing end-of-life treatments with family members and physicians, and designating health care proxies.  Elizabeth O’Brien, retirement reporter, also suggests reviewing elder planning tools and resources, which includes a free consumer End of Life Guide. To ...

Rate Hike Pause is Good News for Leveraged Closed-End Funds The Federal Reserve held steady on interest rates last week, not long after Fed chief Janet Yellen indicated officials would "proceed cautiously."  This could benefit leveraged closed-end funds.  These funds tend to be more volatile than other financial products, Binyamin Appelbaum explains, but they may be a smart investment for people with a long ...

How to Prepare for the Lease Accounting Standard The new lease accounting standard could have a significant impact on companies' balance sheets after it takes effect.  Chris Hatten, CPA, and Nicole Riley, CPA, with PKF Texas discuss five things companies can do to prepare. To read the full article in the Houston Business Journal, click: 5 Things to Consider Under the New Lease Accounting Standards. ...

Estate of Morrissette v. Commissioner, 146 T.C. No. 11 (April 13, 2016) The Tax Court’s ruling in Morrissette is very important to the estate planning community, in that, intergenerational split-dollar life insurance arrangements have become much more popular since the IRS released its final split-dollar regulations in 2003. Yet, widespread use of this technique has been suppressed by uncertainty with respe ...

Five Proven Strategies to Generate High Growth In this article, Hinge Marketing focuses on organic growth and five proven strategies for generating it. ...

Six Transaction Risks Owners Face Selling a Company that May Explain DLOM (Part I of II) In this first of a two-part article, Robert Reilly reviews the various models analysts use to estimate the DLOM and factors analysts consider in the DLOM selection. Valuation analysts often value closely held companies for transaction, taxation, financing, accounting, litigation, and other purposes. Depending on: 1) the ...

Advising Your Business-Owner Clients on Transitions As baby boomer entrepreneurs move toward retirement, their advisers should ask a series of questions about their financial and emotional states to help them plan their exit strategies.  Patricia M. Annino, JD, suggests, among other things, advisers should ask about how quickly clients want to sell, how the sale will affect their families, and whether they ...

Federal Agencies Face New Disclosure Requirements for Public-Private Partnerships Federal agencies will be required to present disclosures about public-private partnerships in their general-purpose financial statements under guidance issued by the Federal Accounting Standards Advisory Board.  Ken Tysiac, JofA editorial director, discusses the standard. To read the full article in the Journal of Accountancy, ...

The debate over the use of non-GAAP performance measures continues.  Even as the prevalence of these items grows in the financial reports of public companies, cautionary tales of the uses and abuses of such metrics garner headlines.  Lucas M. Parris, senior member of Mercer Capital’s Financial Reporting Valuation Group, explains. To read the full article in Mercer Capital's Financial Reporting Blog, click: ...

Electronic Communication can be Fraught with Peril for the Unwary CPA Electronic communication can be fraught with peril for the unwary professional. CPAs who become over-reliant on this form of communication confront increased professional liability risk. This column explores some of the more common risks CPAs may encounter with electronic communication and discusses how a professional can make appropriate ...

Economic growth in the U.S. registered a frail 0.5% in the first quarter; the worst showing since Q1 of 2014.  A strong dollar and a drive by businesses to draw down inventories contributed, as did slow investment due to low oil prices.  However, Lucia Mutikani discusses that analysts are optimistic the pace will pick up as some stifling factors fade in coming quarters. To read the full article in Reuters, ...

Companies Plan Cost Reductions Over Economic Concerns Spurred by concerns over the global economy, 88% of respondents to a survey of senior executives at Fortune 1000 companies say they are planning to look for ways to cut costs in the next two years.  Matthew Heller explains. To read the full article in CFO.com, click: 88% of Firms Planning Cost Cuts in Next Two Years. ...

Three Apps That Can Make Traveling Easier Apps for last-minute hotel booking, finding your way through traffic, and booking flights can make your travel experience more enjoyable.  Greg LaFollette, strategic adviser with CPA.com, provides some tips to breeze through your next trip. To read the full article in the Journal of Accountancy, click: Expanding Your App-titude. ...

In Part 1, Travis W. Harms, Mercer Capital Financial Reporting Valuation Group lead, walked through the mechanics of the option pricing model (OPM) with a view to making the model more intuitive to non-specialist report users.  In this post, he addresses the model from a more qualitative perspective, evaluating the model’s use and potential misuse in practical application. To read the full article in Mercer ...