Financial reporting

The Federal Reserve cut its benchmark rate 75 basis points to 3.5 percent in response to a worldwide sell-off in stock exchanges as fears of a recession widened.

The stimulus package that President Bush and Congress are hammering out could be enough to jumpstart the economy, but don't count on it.

It’s the East vs. the West again, no doubt about it. If you look at Baby Boomers today, they seem to have a lot in common but a recent nationwide survey by Bell Investment Advisors shows that those Boomers living in the Western part of the country have a markedly different outlook on their life and that includes health and money. Jim Bell, who is president of Bell Investment, says that people who get the greatest enjoyment from their lives are also the people who are the most proactive about planning for their future. “People’s physical condition, their family, career, and finances are all integral parts of their retirement well being.” He points out that these are the key areas where he finds the major differences between the West and the rest of the country. Now, I’m an Easterner, born, bred, and educated, and have questions about my Western brethren but according to Bell the survey of 500 high-net-worth 60-year olds uncovers the fact that Western boomer investors are less likely to get conservative in their investments and plan to continue reaching for higher investment returns over the next five years. Then too, the survey seems to indicate that Western boomers exhibit more optimism than Boomers living elsewhere and that they are more likely to pursue personal passions or alternative careers during retirement. So, what does this all mean? According to Bell, Westerners are taking a much more proactive approach to shaping the future of their retirement. “Whether it’s due to social atmosphere or political environment, Boomers in the West seem to be more open in discussing finances with their families and more committed to earning higher investment returns.” Bell points out that Boomers in the Northeast seem to show the most dissatisfaction with their lives and most expressed the need to improve their community, finances, career, and their relationships with family and friends. In fact, Bell notes that Northeasterners have the lowest rate in the country when it comes to discussing finances with their parents or children. As to the Midwest and South, Bell says they are squarely in the middle, showing enough confidence in their financial well being and ample interest in having a good life. But is there any common ground here? Yup! According to Bell, all the regions share in common a positive outlook on their future as they continue to redefine the meaning of retirement.

The Financial Accounting Standards Board began testing a codification of U.S. generally accepted accounting principles that reorganizes thousands of U.S. GAAP pronouncements to make them easier to find.

The Supreme Court has handed down a unanimous decision in a case involving the deductibility of investment advisory fees by trusts, ruling that the expenses are deductible only to the extent that they exceed 2 percent of the adjusted gross income.

The International Accounting Standards Board has issued a revised version of its standards for accounting for business combinations such as mergers and acquisitions, in coordination with the Financial Accounting Standards Board, in a move that will highlight the expenses of business combinations that used to be considered assets.

New York University's School of Continuing and Professional Education plans to begin offering a new certificate in not-for-profit accounting and governmental reporting.

The Mortgage Bankers Association has written to the Financial Accounting Standards Board asking for more flexibility in accounting for troubled mortgages to help prevent foreclosures.

The Internal Revenue Service has established rules for substantiating lump-sum charitable contributions made through the Combined Federal Campaign or similar programs such as a United Way campaign.

Payroll processor Paychex has introduced a debit card that offers a way for a business client's employees to access their flexible spending account funds.

Tax practitioners who take the plunge into financial planning find that it's a natural step to go from preparing a tax return and answering a client's questions, to tax planning and full-scale financial services."Financial planning has been a nice blend of what I'm already doing for my clients," explained Matawan, N.J.-based CPA Salim Omar.

By now, the excitement of receiving college acceptance letters is likely to have been long ago replaced by the shock of the tuition bills that follow enrollment. Or the joy of a child's graduating from college - and no longer incurring tuition - is eclipsed by the obligation to repay student loans. As families scramble to get the largest grants and lowest interest rates available, they should not overlook the tax implications of the arrangements they make.The tax breaks fall into two categories: ones for paying the education costs themselves, and deductions for paying interest on loans used to pay the bills. Most of the tax provisions are restricted to those with incomes below specified amounts, and those amounts vary from one tax provision to another. This creates additional confusion for families attempting tax planning and increases their need for professional guidance.

FIXED-INCOME ANNUITY HELPS RETIREMENT INCOMEMixing a fixed-income annuity into a retirement income account provides greater long-term wealth for investors than a portfolio of equity and bond investments alone, according to a study by MassMutual Financial.

A new wealth management firm is launching as a result of a merger between Yampolsky Mandeloff Silver Ryan and Citrin Cooperman & Co. LLP.

In partial deference to corporate appeals, the Financial Accounting Standards Board has agreed to allow a one-year deferral for part of the implementation of Financial Accounting Statement 157, Fair Value Measurements.Investors have long called for financial statements that report market values - observable or calculated - and FASB constituents in the corporate sector have generally supported the concept. But after a year of preparing to implement FAS 157, corporations went to the board to complain that implementation had turned out to be prohibitively difficult.

The Financial Accounting Standards Board is heading into a year in which the ball of due process will spend a lot of time in the court of the board's constituents.Between New Year's Day and early spring, the board may have as many as 11 documents issued for public comment, with a couple more out by summer. Three final documents may be issued in the first quarter, but they're the only pronouncements expected before 2009.

Is weather more important than healthcare costs? According to a new national research from Longevity Alliance and conducted by Harris Interactive, U.S. adults aged 40+ who plan on relocating after they retire may overlook how their healthcare costs could change from one location to another. Actually, about three in four (76 percent) of adults planning to relocate after retirement say that they consider the cost of healthcare as important or very important in their decision. But, the cost of healthcare is ranked number three of five behind the overall cost of living, and climate, and just ahead of ease of transportation and proximity to friends and family. What this means is that overlooking the cost of healthcare and health insurance can have real consequences for retirees. Costs vary from one part of the country to another and insurance premiums, Medicare health plans, Medicaid, and long-term care rates can also change exponentially. As an example, consider that the average annual premium for a Medicare Supplement insurance policy in New York could be around $3,700; yet that same policy holder moving to Phoenix will find the premium to be as low as $1,200. Quite a difference. According to Longevity Alliance president Steve Zaleznick, too may times, people considering retirement and relocation don’t give any thought to how it could affect their healthcare and insurance costs. “As retirees grow older, those costs grow larger, so choosing a region that makes those costs affordable is a key component of a sound retirement strategy.” Zaleznick offers five specific tips before anyone moves:

Banking giant HSBC USA has said it would sell its Wealth and Tax Advisory Services USA business to some of its managing directors for up to $65.9 million as part of a management buyout.

The Internal Revenue Service and the Treasury Department have proposed two sets of regulations relating to pension plans.

In the event you just came in from Mars, you will note that we are getting ready to launch into the year 2008. This is generally the time of year when everybody and his dog begin to hit us over the head with all kinds of financial advice. It’s also the time of year which is usually referred to as “housekeeping time.” That’s where you take an annual review of your total financial picture. Not everybody does this, which is kind of unfortunate. Most people don’t seem to realize that during the last year, things have changed such as personal goals, financial plan, even life circumstances. According to Stoker Ostler Wealth Advisors (formerly Private Wealth Management), a fee-only wealth management firm based in Scottsdale, Arizona, this is the time to revisit key areas and see if changes need to be made that will better serve your needs. Cody Amis, senior financial planner at the firm, says “Just like getting an annual physical, doing maintenance on your house or having your car tuned up, you want to take a look at your total financial picture at least once a year. Accounting for life changing events can help steer you on the path to your dream of a secure future.” Amis is a firm believer that organizing financials annually will set the right tone for financial success. “It’s a myth that this is only for people who are older or wealthy,” he adds. “I can’t emphasize enough how important this process is for young families, single mothers, retirees, and anyone who owns a house or property.” He offers five tips to help people get organized: 1) Create a Statement of Net Worth. This, he says, serves as a snapshot of all of your individual assets and liabilities. 2) Review your Estate Plan. Amis advises that it is important to have a will, Revocable Living Trust, Durable Powers of Attorney, and Health Care Powers of Attorney. 3) Risk Management. He notes that it is also important to identify any significant changes to your family or your assets that may warrant an adjustment to your insurance policies. In other words, the advice is to make sure that your property, liability, and health insurance policies offer coverage consistent with your needs. 4) Review Your Retirement Plan. Amis says that the new year is an ideal time to maximize your retirement plan contributions or revisit the plan’s investment allocation. 5) Don’t Procrastinate. Make a commitment to have your financials in order by the end of January so that you can get the most out of 2008. In short, the sooner you get organized, the better. And a Healthy and Happy New Year to you and yours. See you in ’08.