Financial reporting

The Internal Revenue Service plans to make it easier for financially troubled homeowners to avoid federal tax liens that block them from selling their homes or refinancing their mortgages.

The Financial Accounting Standards Board has issued a proposed standard to address the controversial issue of applying fair value accounting to assets and liabilities acquired from a business combination.

Given the economic implosion where trillions have been lost in personal investments and wire houses are boarding up like ice cream shops in January, high-net-worth clients are looking to their accountants and wealth management advisors to help preserve their investments amidst roller-coaster swings in the markets.Compounding their concern over the economic malaise, high-net-worth individuals now also have to worry about the potential affects of President-elect Barack Obama's tax and economic policies.

COHN CREATES RECOVERY TEAMRoseland, N.J. - Accounting firm J.H. Cohn has formed a Client Economic Recovery Team to advise financial institutions and public companies affected by the financial crisis.

It's hard to believe we can write another column about pensions and the bad GAAP applied to them, but here we are again, beating the same old drum. In addition, there is a new drum in the Pension Protection Act of 2006.While we're putting this column together, the market is continuing its sliding and bouncing, and the government is doling out money left and right (and in between) to bail out insurers, mega-banks, regional banks, investment banks, depositors, money funds, brokerage houses, and who knows what else.

Government officials now expect 401(k) plan sponsors to conduct periodic due diligence reviews. With respect to their 401(k) or other retirement plans, the problem is that most sponsors (owners) do not have the in-house resources to do so.This is not something that 401(k) plans historically did. On the heels of the recent mutual fund scandals, though, Labor Department officials indicated that sponsors had a duty to periodically investigate plans and benchmark funds and fees.

PLANNERS GET NEW CLIENTSTwo thirds of certified financial planners have seen an increase in potential clients as economic turbulence has increased in the past several weeks, according to a recent survey.

On Thursday, Congress passed a waiver of the minimum distribution rule for 2009, but not for 2008, for employer-provided qualified retirement plans and individual retirement accounts and annuities in H.R. 7327, the Worker, Retiree, and Employer Recovery Act of 2008. President Bush is expected to quickly sign it.The Treasury Department is studying whether to provide relief with regard to 2008 minimum distributions.

The European Union has formalized its waiver allowing companies to file financial statements in European markets using U.S. generally accepted accounting principles -- as well as the accounting standards of five other countries -- without reconciling them to International Financial Reporting Standards. The measures declare U.S. GAAP, as well as accounting standards from Canada, China, Japan, South Korea and India, to be "equivalent" to IFRS as adopted in the European Union. An earlier transitional waiver was due to expire at the end of this year. European Internal Market and Services Commissioner Charlie McCreevy welcomed the measures: "Today's adoption by the commission is a momentous step. It marks the culmination of important work spanning several years." Standard-setters in the U.S. and at the International Accounting Standards Board, which sets IFRS, have been working to converge the two sets of standards. Earlier this year, the U.S. announced that it would allow companies to file here in IFRS without reconciling their accounts to GAAP. The European Commission said that it would review the situation of standards in Canada, China, South Korea and India by 2011 at the latest.

A completely revised Form 990 will require an overhaul of internal policies and procedures for most tax-exempt organizations, according to Joyce Underwood, director of nonprofit taxation at BDO Seidman's Institute for Nonprofit Excellence.

In the current financial turmoil, what might help is a more presentable presentation of financial statements.

I received some interesting information from Brian Meehan of Celtic, Inc. regarding a little practical advice on how to weather a volatile market when it comes to college savings. He notes that if you are like most people, the current market conditions can cause concern when you see your long-term investment accounts, including college savings and retirement plans, losing their value. He points out that the College Savings Plans Network, a non-profit association representing states who administer 529 college savings and prepaid plans, and an affiliate of the National Association of State Treasurers, encourages people to keep the following principles in mind when making decisions about their college savings accounts during tough economic times: Stay Focused on Long-Term Objectives: As the market moves in up and down cycles, it is vital that one keep emotions out of affecting financial decisions. Look at the performance of your college savings account since inception as well as shorter-term performance. Diversify Your Investments: You need a mix of stocks, bonds, and cash investment options or in an age-based option which typically provides this sort of mix. Make Changes, if at all, Gradually: Invest any new funds into more conservative options and reallocate equity options to more conservative ones. Move funds gradually so as to not lock in, or realize, all of your losses and to be able to take advantage of a market recovery. Limit Reallocations: All 529 plans have a one-time-per-calendar-year rule on making reallocations between investment options. If you have already made a reallocation of your account this year, you cannot make another change until next year. However, you can always redirect new contributions at any time. Make Regular Investments: Often referred to as “dollar-cost averaging,” this approach lessens the risk of investing a large amount in a single investment at the wrong time. Invite Family to Help: Ask your family and friends to help build the college savings by contributing to your account as a holiday or birthday gift. Many plans offer gift certificate forms or contribution slips to facilitate making a contribution as a gift. Talk to your Plan Provider: If you have specific questions abut your 529 savings or prepaid plan, call your plan provider. To learn more about the College Savings Plan Network and 529 college savings plan across the country, visit collegesavings.org.

The Internal Revenue Service has given schools and tax-exempt organizations more time to finish writing their retirement plans.

Accounting firm Weiser LLP has hired an unemployed investment banker and Massachusetts Institute of Technology graduate who gained fame last summer for wearing a sandwich board on New York's Park Avenue that advertised, "Experienced MIT Grad for Hire."

The Financial Accounting Standards Board has issued new standards that increase the disclosure requirements that public companies need to make about their financial asset transfers and variable-interest entities.

To mark World Accountancy Week, the International Federation of Accountants has released the results of a survey that sought the views of leaders of accounting institutes worldwide on the current credit crisis and other top issues for the profession.

International Accounting Standards Board Chairman Sir David Tweedie said that the U.S. Financial Accounting Standards Board would still continue to play an important role in the standard-setting process, even after the transition to International Financial Reporting Standards in the U.S.

The College for Financial Planning plans to add renewal requirements to some of its professional designations starting next spring.

The Public Company Accounting Oversight Board has issued an alert highlighting how the current economic crisis could increase various audit risks such as fraud.

Worries about the financial crisis are spreading rapidly, with job losses hitting levels not seen in over three decades, and people are wondering if CPAs have the answers to help them get through the turmoil.