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November 2009 |
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The Balance Sheet —Fourth Quarter Edition— |
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A New Resource for B & I Members |
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Welcome to the first edition of the Business and Industry e-zine The Balance Sheet. It will come to your inbox quarterly, full of informative articles categorized by the tasks you perform every day. The articles are all original material, authored by ASCPA members and Friends of the Society. Check out the Business & Industry Resource Center Page for photos and bios of contributing authors. Editor Ron Box has done a masterful job of creating this communication vehicle as part of the ASCPA’s revitalized Business and Industry Committee. The committee is also responsible for the planning of the Business and Industry Conference, to be held in spring 2010.
To visit the Business & Industry Resource Page, click here.
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The Current Commercial Lending Environment By Tom Broughton, President and CEO, ServisFirst Bank & Paul Schabacker
Access to credit can mean the difference between life and death for many businesses. The financial crisis has caused a great deal of change in the banking industry and, unfortunately, this can mean trouble for many businesses. Ask yourself a few questions. Does it appear that your bank is being very cautious about credit commitments? How does your bank decide credit issues? Do you know the risk rating assigned to your company by your banks regulators? What can you do in these uncertain times to improve your chances of getting the credit your business needs? The answers to these questions can dictate the survival of your company.
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Governmental Affairs | |||||||||||
Proposed Alabama Regulation Strikes Business Privilege Tax Deduction By Bruce P. Ely, Partner, Bradley Arant Boult Cummings & James E. Long, Jr.
Alabama’s business privilege tax (“BPT”) is imposed on every business entity doing business or registered to do business in Alabama, but provides for a deduction in computing the taxable base for the taxpayer’s investments in the equity of any other business entity that is also doing business in Alabama. Ala. Code § 40-14A-23. The deduction is designed to avoid the inherent double taxation that would result if the net worth of both the parent/investor and subsidiary/investee are subject to the same tax. The Alabama Department of Revenue, however, recently issued a proposed regulation that would strike this statutory deduction for all tax years beginning after December 31, 2009.
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Cyber Liability: Your Exposure May Be Greater Than You Think By Mark Green, Vice President, Willis/HRH & Mike Roman
It’s hard to go a week without seeing a headline about a stolen laptop or the loss of private data. In fact, most of us have likely received a letter stating that ‘your personal information may have been compromised, and your credit card company will be issuing you a new card, or your bank will be assigning a new account number to prevent the theft of your identity’. The number of data breaches at businesses, government agencies, and educational institutions in the U.S. jumped by nearly 50 percent in 2008 compared with 2007, according to the Identity Theft Resource Center.
The reality of our digital world is that non-public personal information is being stored and transferred in quantities never before realized. A University of California, Berkeley report stated that more data has been aggregated and stored in the last three years than in the entire history of mankind. Even if your company does not operate within the information technology arena, the fact is that you have an exposure to loss associated with information theft.
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Accounting Rules | |||||||||||
Accounting Rule Changes for Variable Interest Entities (SFAS No. 167) By Ron Box, Chief Financial Office, Joe Money Machinery
When asked for a prediction regarding what may be the most important accounting change for business and industry in 2010, Dr. Steve Grice (Professor of Accounting at the University of Alabama in Birmingham) named Statement of Financial Accounting Standards (SFAS) No. 167, entitled “Amendments to FASB Interpretation No. 46(R),” FASB Statement 167: Consolidation of Variable Interest Entities.” The Financial Accounting Standards Board (FASB) significantly changed the consolidation guidance related to variable interest entities (VIEs) with the issuance of SFAS No. 167 in June 2009. The changes could “trigger” a consolidation in certain circumstances that previously would not require consolidation, thus, resulting in a potentially enormous impact on corporate balance sheets.
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Managing Investment Risk Through Asset Allocation By Tony Smith, Senior Vice President, UBS Financial Services Inc.
How does an investor create an appropriate, long-term investment plan? Spreading assets over a variety of different investments is perhaps the most important rule one can follow. Because no single asset class performs best in all economic environments, the performance of a diversified portfolio is expected to fluctuate less as losses from some investments are offset by gains in others.
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A Proactive Approach to an Epidemic By Jennifer Oleksa, Alabama Society of Certified Public Accountants
Although the media is reporting that there is a decline in confirmed cases of the H1N1 virus, the CDC says that the virus remains widespread. In addition to these concerns about the H1N1 virus, flu season is approaching. Do you have a plan in place for your staff?
According to the October poll by the Society for Human Resource Management, sixty-four percent of organizations polls felt that the H1N1 virus could negatively impact business operations. (SHRM POLL)
Click here for suggestions in overcoming the obstacles of a health epidemic, such as the flu, in your organization
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Troubleshooting Technology Issues: Get to the Root of the Problem By Lisa Kianoff, President & Founder, L. Kianoff and Associates
They called Sue the “go to” person at the small manufacturing company. She was the Controller who had picked up some technical skills over the years and everyone knew it. Whenever some piece of software didn’t work just right, the response was “call Sue.”
Recently there were more “system emergencies” that were consuming more of her work day. Sue was happy to help, but felt some users took advantage when they might have done their own troubleshooting. So the last time she got involved with a computer problem that required her to call the company’s technology partner, she took the chance to ask for advice on handling her team’s technology challenges.
“You’ve got to be like Sherlock Holmes,” the consultant suggested. “Get them skilled at asking questions and separating facts from feelings.” He recommended Sue work with her team to develop a stream of questions to help narrow down the issue, which would either point to a solution or the need to escalate to a more skilled person.
What was Sue's plan? Click here for more.
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Montgomery Circut Court Orders State to Refund Franchise Tax By Jeff Patterson, Jeff Patterson, LLC
On October 16, 2009, Presiding Montgomery Circuit Judge Charles Price ruled that the State of Alabama must refund $30,211, plus interest, in foreign corporation franchise tax to Vulcan Lands, Inc., for tax year 1999. The ruling signifies a turning point in litigation that, for Vulcan Lands, began in 2001, but that dates back to the 1990s concerning the overall challenge to the state’s franchise tax.
Read about the background of the case and see more details here.
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Economic Trends and Projections By Joe Keating, Chief Economic Officer RBC Bank
When preparing budgets and financial projections, a reliable source for important economic trends can be a critical resource. This one-page discussion of key data from the Chief Economic Officer at RBC Bank contains a great deal of valuable information. The projections of important rates and data over the next several quarters can be especially useful in establishing essential metrics for your business.
This trend analysis is intended as a guide for possible future events. See the notes and disclaimer attached to the resource.
Economic and Fixed Income Market Update, RBC Bank (PDF)
Securities and Investment Advisory services offered through NBC Securities, Inc., Member FINRA and SIPC and RBC Bank (USA). Investment products 1) are not FDIC insured, 2) not guaranteed by any bank and 3) may lose value including a possible loss of principal invested. NBC Securities and RBC Bank do not provide legal or tax advice. Recipients should consult with their own legal or tax professional prior to making any decision with a legal or tax consequence. |
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Profile of Boyd Busby, Hodges Warehouse + Logistics
Originally from Irvington/St. Elmo, AL, a small town south of Mobile, Boyd graduated from Theodore High School in 1989. His first job was as a copier repairman in Mobile and then as a car salesman. "I refer to my time selling cars as “The University of Joe Bullard Oldsmobile”. His next stop was at Troy University in 1996, where he enrolled to study environmental science. Chancellor Hawkins saw that accounting was a better fit for Boyd and referred him to Dr. Tom Ratcliffe, where he was convinced that accounting was the greatest major at Troy. After working with Wilson Price for three years, Boyd became the Controller & CFO for Hodges Warehouse + Logistics in 2001. Hodges has 5 million square feet of warehouse space, owns and operates a real estate company and a small fleet of semi-trucks, which the majority of their business is in Alabama.
See how Business and Industry Committee Member, Boyd Busby transitioned from driving an 18 wheeler in college to CFO today.
Look for a CFO profile in every edition of The Balance Sheet.
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How to Detect and Protect Against Insider Fraud By Ron Box
In these times of great uncertainty, it can appear that threats march toward your business in great numbers. It is easy to believe that the risks facing your business all come from the outside. However, the biggest threat to your business could be inside your business, working a few yards away from your office. That threat could be the very employees that you trust the most. That position of trust, sometimes earned by years of apparently loyal service, can create a great risk. It is difficult for some executives to consider the possibility that fraud, embezzlement, forgery, etc. could be happening today and be perpetrated by the most unlikely of people. Yet, it happens literally every day. This article will discuss simple methods regarding how you can avoid putting your business at risk from insider fraud.
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Looking for More Resources?
Do you have an insatiable desire for more information? The Business and Industry Committee have compiled some websites that contain topics that are current and valuable to you. And, don't forget that we are developing our own Business and Industry resource page with all original material for you to peruse. We will continue to update this list. If you have a suggestions for a website concerning industry news, email Shanna Jackson (sjackson@ascpa.org).
Here's just a few:
Want more? Click here
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About the ASCPA
The Alabama Society of Certified Public Accountants [ASCPA] is the statewide, professional membership organization representing over 6,500 Alabama CPAs in public practice, industry, government and education. Eleven chapters, various committees and task force groups made up of CPA volunteers develop programs and address issues to help all members be successful professionals. The ASCPA is governed by a Board of Directors, managed by a full-time staff, guided by a strategic plan and is constantly striving to serve the needs of Alabama CPAs. Visit ASCPA.org >> |
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© 2008 Alabama Society of CPAs | PO Box 5000 | Montgomery, AL 36103-5000 |