Archive for the ‘Accounting’ Category
by John Fisk and Anita Sherman, CPA | Members of the Manufacturing & Distribution Services Group
The balanced scorecard (BSC) has been used by companies since the early 1990s and continues to be an effective strategy performance management tool for organizations across the world. Based on a study by Bain & Company entitled ‘Management Tools & Trends 2011’, the BSC is the 6th most utilized management tool globally and the 12th domestically.[i] Given its widespread usage and support, this is a device you should consider employing to increase the overall value and profitability of your business.
by Jeff Curiel, CPA | Manager, Team Member of the Not for Profit Services Group
Financial statements regularly slide over your desk and pass through board members’ hands, providing a wealth of financial data on your nonprofit’s most recent month, quarter or year. But do you and the board rely on this valuable information to make business decisions and plan for the organization’s future?
by Anita Sherman, CPA | Managing Partner
In my April 19, 2012 article, I discussed the personal financial planning needed to get yourself and your family ready for a business transition or sale. In my March 22, 2012 article, I discussed the importance of preparing key employees for transition. This week I want to focus on preparing the company’s financial statements for a transition or sale, in order to maximize the value and provide you peace of mind.
by Anita Dudley | Manager, Tax Services Group
The American Payroll Association (APA) has issued a press release that describes five basic tips on how to avoid IRS penalties when paying independent contractors.
by Anita Sherman, CPA and Larry Greenwalt, CPA
Interest rate swaps have been used for a number of years to hedge against rising interest rates. In the last several years, this technique has become more commonly used with mid-sized companies. SWAPS are useful in hedging against intermediate and long term loan interest rate risk, which makes SWAPS ideal for owner occupied properties and lines of credit that tend to have a certain level of “permanent” borrowings.
Hans Michael Hurdle of PNC Bank, noted that we are experiencing a 60 year low in 10 year Treasury yields. In order to stimulate the economy, the Fed has been able to keep interest rates artificially low. Hans believes that as our economy continues to gradually improve, and if there is a Europe resolution, interest rates will pop up. There may be a 3 to 12 month window in which to take advantage of the current low rates. The market consensus is that LIBOR rates will increase over the next 5-6 years, and LIBOR is the basis used by most banks to determine their pricing.
by Amanda Meko, CPA | Partner, Director of the Audit & Other Assurance Services Group
Many businesses enter into lease arrangements. Think about lease arrangements your company has. You probably lease office equipment, like a copier and a postage meter. You may lease equipment or vehicles. You may also lease space, such as an office or an entire building. Many of these leases are currently treated as operating leases. That is, you record rental expense in your income statement as you make payments on the lease. Now imagine how different your financial statements would look if you had to treat any long-term lease (greater than twelve months) as a capital lease. Under the new proposed rules, an asset and a liability would be recorded in the balance sheet, and the lease payments would be split into interest expense and a reduction of the liability, instead of showing up as rent expense. The asset would be amortized as noted below. For some lease arrangements, such as office equipment, the impact may not be that great. However, a building lease could have a substantial impact on the balance sheet and related debt and equity ratios.
by Tim Ayler, CPA | Partner, Director Construction Services Group
Change orders are a common occurrence for most contractors. Although it is common, the treatment of change orders in the accounting system is something that is not always done correctly. Sometimes change orders go without pricing even though the work is defined and costs are incurred. Once the price is negotiated it could result in the change order being treated differently for accounting purposes, so it is best to record it conservatively and correctly the first time.
by Larry Greenwalt, CPA, Managing Partner
In our recent Business Intelligence Survey, 68% of the respondents reported reducing employee pay, hours or benefits in the last 18 months (43% of not for profit respondents, 75% of manufacturing and distribution respondents, 83% of service and professional respondents, and 100% of construction respondents), as follows: