Financial reporting

The Financial Accounting Standards Board reaffirmed an earlier vote against a blanket deferral of Statement 157, "Fair Value Measurements," but granted a deferral for some assets and liabilities.

Microsoft has debuted a blog, Money Insider, focusing on the latest news about its Microsoft Money personal finance software and MSN Money site.

Mixing 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 Group.

California wealth management firms Kochis Fitz and Quintile Wealth Management said they plan to merge, effective Jan. 1, 2008, with the combined firm to be known initially as Kochis Fitz/Quintile until a new name can be found.

Did you know that women provide the lion's share, up to 70 percent, of the $350 billion AARP estimate of the total value of uncompensated caregiving last year in the U.S.? Yep, according to the National Center on Women and Aging, a majority of those female caregivers are employed, but are often forced to reduce their hours or retire early due to their caregiving responsibilities, which can end up costing them each a staggering average of $659,130 in lost wages, savings, benefits, and pension over a lifetime. To help the estimated 40 million women who will retire over the next two decades to achieve increased financial viability, retirement security, and avoid the negative consequences so often related to care giving, LifeSecure Insurance Company and the Women's Institute for a Secure Retirement (WISER) have partnered on a consumer awareness and education initiative. LifeSecure's marketing efforts will include special communications targeting female consumers and creating awareness of the issues. In addition, consumers will be directed to the comprehensive library of useful financial planning, caregiving, and related information at WISER's online data center (see www.wiser.heinz.org/portal). "At LifeSecure, we are committed to helping women overcome the extreme financial and other dangers so often associated with informal caregiving,” says Lisa Wendt, president and CEO. “Having a complete understanding and easy access to accurate and relevant information are probably some of the best weapons women can have in dealing with these issues.” Jeffrey Lewis, chairman of WISER, notes of the partnership, "Over the years, we've found that many people--and most women--simply don't have enough information about building a secure retirement or dealing with negative financial impacts of informal caregiving. The solutions they need begin with understanding and education.” WISER works to increase awareness of the structural barriers that prevent women's adequate participation in the nation's retirement systems. Created in 1996 by Teresa Heinz Kerry, chairman of the Heinz Family Philanthropies, its goal is to improve the long term economic security of millions of American women and men. It is an independent 501(C) 3 organization. LifeSecure Insurance Company (www.yourlifesecure.com) offers a new generation of long-term care insurance coverage. The company is focused on providing understandable, affordable coverage, and high levels of customer service and support. The intention behind all this is to help women feel financially secure and knowledgeable enough about a critical financial issue such as the informal caregiving environment.

The Financial Accounting Standards Board has decided to defer the effective date for FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes," for nonpublic entities.

Sen. Chuck Grassley, R-Iowa, ranking member of the Senate Finance Committee, has sent letters to six media-based ministries asking for information about their expenses, executive compensation and the amenities lavished on their executives to see if they are violating their tax-exempt status.

The International Accounting Standards Committee Foundation, the oversight body for the International Accounting Standards Board, has taken several steps to enhance its governance structure and allow more input from government securities regulators, as well as investors.

Congressional tax writers have issued a subtle warning to charities and other nonprofit organizations: Start placing a heavier emphasis on serving diverse communities, or you may risk losing your tax-exempt status.That was the veiled threat leveled at tax-exempt organizations during a round of hearings before the House Ways and Means Oversight Subcommittee. In announcing the hearing, Chairman John Lewis, D-Ga., noted that while "charitable organizations play a key role in our country's ability to respond to the needs of its communities, those communities are becoming increasingly diverse."

Individuals managing their own assets receive no legal guidance on the standards for prudent investing.Fortunately, they can look to the Uniform Prudent Investor Act for guidelines. The act sets forth standards that govern the investment activities of trustees, and is currently the law in almost every state. While those standards do not apply to individuals managing their own assets, they do provide guidance on what the courts consider prudent investing.

SMHG BUYS 25% STAKE IN IPRO ONESanders Morris Harris Group, a financial services holding company, has acquired a 25 percent ownership interest in iPro One, a company that provides CPA practices with investment systems and products. Terms of the deal were not disclosed. IPro One has exclusive contracts with more than 1,000 CPA firms that provide investment products and services to clients. The company has signed letters of intent to purchase interests in CPA-affiliated advisory firms in several locations with a total of more than $1.5 billion in assets under management.

After a summer of discussions, the Financial Accounting Standards Board is expected to release as many as 10 documents by the end of the year or early in 2008.Susan Bielstein, FASB director of major projects and technical activities, said that the board had shown strong progress this year, especially with the completion of a business combination standard that it wrote jointly with the International Accounting Standards Board. It was the first joint standard the boards have produced, and it's expected to be released in mid-October. "It was a real milestone in the convergence process," Bielstein said.

You’ve undoubtedly heard the term “rebalancing.” It has nothing to do with a highwire act although some in the financial community might say that’s exactly what it is. Rebalancing your portfolio is rather critical and it should be done at least annually so that your financial goals remain intact. I do know that many investors don’t even consider this. In fact, friends and family alike tell me that it’s just too time-consuming and besides, they know little about what it takes to do so. To counter this, I like to offer an example. Here’s one courtesy of my friends at First Investors: Take my friend Fred who has a portfolio of 60 percent domestic stocks and 40 percent bonds. He’s had this for the past five years and now it has an allocation of 69 percent domestic stocks and 31 percent bonds. So, over the five year period, stocks went up by 13.4 percent while bonds increased by 4.5 percent. What does this mean? It means that the portfolio wandered or as they call it in financial circles, “drifted.” So, Fred’s portfolio changed rather dramatically even though he did nothing about it for five years. What this also means is that even what appears to be positive developments can easily toss your entire asset allocation out of balance. This translates to a potential for risk coupled with the fact that your return may not be what you had already envisioned. Therefore, if you’ve had a portfolio just sitting there, you might want to reassess the investment priorities, review the securities, and rebalance if necessary. First of all, conducting an annual review requires you to identify whether any of the changes may require a financial response such as a new investment strategy. This may be true because you may have set up certain financial goals or lifestyle considerations which have now changed. Next, if you knew that every investment in your portfolio would throw off the same return year after year, then what would you need to rebalance? That’s not reality. A portfolio drift such as outlined above, can affect your asset allocation…and all to the negative. Finally, suppose your portfolio does need rebalancing. What can you do? The most cost-efficient way to do this is to change the allocation of future investment contributions. What does that entail? Well, you could continue investing the same amount on a regular basis in an overweighed asset while increasing contributions to underweighted investments until you feel that your target has been reached. Or, you can choose to make a lump-sum investment into the asset class that is underweighted. And, you can always sell existing investments that have become overweighted and use those proceeds to buy shares of assets that are then underweighted. Keep in mind that for the last option, mutual fund investors can usually shift money from one fund to another within a fund group without incurring a sales charge. Of course, you still have to consider any tax consequences. But the bottom line is portfolio maintenance. Don’t be inactive!

Nearly everyone can use lessons in financial literacy, and Dan Iannicola Jr., deputy assistant secretary for the U.S. Treasury Department's financial education office, provided suggestions on how women accountants can educate their clients.

I just reviewed the results of a couples retirement study conducted by TNS Canadian Facts for Scotiabank and was surprised to learn that when it comes to retirement, Canadian couples aged 50 and above simply don’t agree with each other on such important topics as finances and lifestyle. Apparently, according to the study, this lack of consensus comes from too little conversation. (So, what else is new?) The study looked at Canadian couples with at least one partner aged 50 or over and still working. It examined attitudes and planning for post retirement as well as financial and lifestyle priorities. Examples of such priorities include travel, spending time with family and friends, practicing healthy aging, and accommodations. (That last one refers to place of abode.) It also reflects the fact that less than one quarter of respondents claim to have had a thorough discussion with their spouse or partner about all aspects of retirement while 55 percent say they have a rather rough idea of how each other feels. Some 23 percent haven’t discussed it all, or haven’t discussed it as much as they should. (I love that “rough” idea.) In short, the results found that Canadian couples are most out of touch with each other in the areas of financial planning, financial concerns, and their outlook toward retirement. In fact, some 60 percent disagree on the basic question of whether or not they are even looking forward to retirement. (Oh, my, that’s not what I hear from my train buddies who are much younger than me and would retire at the drop of a dime.) Moreover, couples apparently also disagree when it comes to the role that family and friends will play in retirement, with only half agreeing. Surprisingly, in only eight percent of couples are both people primarily interested in spending time with their partner rather than with other family/friends or by themselves. (Ouch!) This Couples Retirement Study was conducted for Scotiabank using TSN Canadian Facts online panel. Respondents for the survey were couples who are married or in a common-law relationship, with at least one partner aged 50 or over, and working full-time. Household investable assets were at least $50,000. Of course, couples do share the same level of concern in their ability to retire comfortably with 65 percent saying that they are very or fairly confident they can do so. A full 44 percent of respondents, however, still do not have a formal financial plan. (Hmmmmm!)

The Senate Banking Committee held a hearing on allowing U.S. companies to use International Financial Reporting Standards.

SEC OKS RULE ON DEFERRED VARIABLE ANNUITIESThe Securities and Exchange Commission has approved a rule from the Financial Industry Regulatory Authority that would crack down on abusive sales of deferred variable annuities, particularly to senior citizens.

Life insurance agents and companies have always tried to find ways of making costs paid by business owners tax deductible.The situation became ridiculous a few years ago with outrageous claims about how Sections 419A(f)(5) and (6) of the Internal Revenue Code exempted employers from any tax-deduction limitations. Finally, the Internal Revenue Service put a stop to such egregious misrepresentations in 2002 by issuing regulations and naming such plans as "potentially abusive tax shelters" (or "listed transactions") that needed to be registered and disclosed to the IRS.

Radon Stancil and Rick Parkes own Diversified Estate Services, a financial planning firm, based in Cary, NC. They have been in practice for more than 30 years. They also co-founded the N.C. Educational Institute that was formed to teach continued education to other professionals as well as the public. In short, they are pretty knowledgeable fellows. They have come up with 10 smart financial ideas to help ensure that an individual’s retirement nest egg lasts a lifetime. And, here they are:

The Social Security Administration said monthly benefits would increase 2.3 percent for more than 54 million Americans in 2008.