Reg A+ is finally here
One of the last pieces to fall into place from the enactment three years ago of the Jumpstart Our Business Startups Act (JOBS Act) occurred on March 25, 2015 when the SEC unanimously adopted final rules amending Regulation A of the Securities Act of 1933. The set of new rules, collectively referred to as Regulation A+, is intended to create additional opportunities for companies to raise capital without having to comply with several of the more burdensome aspects of the traditional registration process.
Regulation A+ creates a two-tiered regime for offerings that may qualify for the registration exemption (Tier 1 for offerings up to $20 million; Tier 2 for offerings up to $50 million).
The new rules are expected to be effective on or about June 19, 2015. The adopting release and the Regulation A+ rules are available here: Final Rules.
FASB formally proposes revenue recognition changes
The Financial Accounting Standards Board’s (FASB) efforts to resolve challenges with the new revenue recognition standard continued last week when the board formally proposed targeted changes that are intended to clarify guidance related to identifying performance obligations and licensing. The proposal stems from input the board received from the transition resource group that provides joint feedback on the converged standard to FASB and the International Accounting Standards Board (IASB), which have been working together to develop more uniform standards. The possible changes to the standard are one reason that FASB last month proposed a deferral in its effective date. Board members said financial statement preparers may need more time to update their processes and systems based on the proposed changes.
FASB proposed delaying the effective date one year so that public organizations would be required to apply the new revenue recognition standard to annual reporting periods beginning after Dec. 15, 2017. Nonpublic organizations would be required to apply the new standard to annual reporting periods beginning after Dec. 15, 2018. Early adoption would be permitted.
FASB is seeking comments by June 30 and can be provided on FASB’s website.
[Source: Journal of Accountancy]
Gonna party like it’s 1999!
First quarter 2015 saw more venture capital invested than in any quarter since the dot-com days, according to new data from Dow Jones VentureSource. “Venture-backed companies also commanded the highest median valuations on record during the period, spurred in part by capital from mutual funds, hedge funds and other public-market investors eager to get their hands on the most promising startups,” notes the report. Venture capital invested in U.S. companies was $15.72 billion in Q1, which is 27% higher than the same quarter last year. Also reported: The largest financing was a $1 billion round for SpaceX which is backed by Capricorn Capital Partners, Fidelity Investments, Google Inc. and Valor Equity Partners. More than 80 private companies are currently backed by venture capitalists at $1 billion or more.
You go GoPro
The highest paid executive of an American company in 2014 was Nick Woodman, CEO of GoPro Inc. According to a Bloomberg News analysis, just before his company went public last June, the 39-year old received a restricted stock grant valued at $248 million. Nice work if you can get it, but that was last year. Bloomberg reports that the company’s shares have dropped nearly 30% this year, the company has slashed its earnings outlook, is battling rumors of activist investors, and announced the unexpected departure of its Chief Operating Officer. But analysts on average are upbeat, expecting GoPro revenues to jump 24% this year. GoPro has signed content partnerships with snow boarder Shaun White, surfer Kerry Slater and Microsoft’s Xbox division. It even sells “Fetch,” a camera mount that enables users to film from the perspective of their dogs. According to Outside magazine, GoPro has 67 percent of the camcorder market, “a share so commanding that its name has become as synonymous with action cams as Kleenex or Xerox were to tissues and copies.”
Top banana at Apple
The highest paid female executive in America last year was Angela Ahrendts, the new senior vice president of retail and online stores at Apple Inc. Ms. Ahrendts, 54, formerly CEO of London-based fashion retailer Burberry Group Plc, became the first woman on Apple’s management team and her pay included an award of $82.6 million, plus a signing bonus and a make-whole grant for awards left behind at Burberry. The entire pay package is currently valued at $105.5 million, according to Bloomberg. She takes the top highest paid female spot in the Bloomberg survey from Yahoo! Inc.’s Marissa Mayer, 39, who fell to No. 3.
Woo-hoo! We’re number 15!
Put a bunch of top international economists, neuroscientists and statisticians in a room and which of the world’s many problems do you suppose they’ll tackle? How about a survey to rank the happiest countries in the world. The just released third edition of the World Happiness Report measures well-being in countries around the world and calls on policy makers to, “make happiness a key measure and target of development.” Northern Europe tops the new world happiness list, led by Switzerland, Iceland, Denmark and Norway. (Just imagine how much happier they’d be if the sun came out for more than 10 minutes a month.) The U.S. came in at number 15, two better than last year, but still behind happy Mexico. If word gets out, Mexico may have to build a border fence. Business Insider published the full list: World Happiness Report
TROUBLES WITH UNCLE SAM
IRS demands more…Can Michael Jackson Estate Beat It?
The Internal Revenue Service is upping its $702 million claim against the estate of pop star Michael Jackson to nearly $731 million – a claim the Jackson estate is fighting in U.S. Tax Court. The IRS said its auditors originally thought the King of Pop owned only 50% of certain master recordings at his death in June 2009, when he really owned 100% of them. The IRS figures that 100% interest was worth $91 million, compared to the $11 million reported on the Jackson estate tax return.
Forbes Staff Writer, Janet Novack, reports that this revision, “brings the IRS’ valuation of Jackson’s estate and lifetime taxable gifts up to $1.178 billion, compared to the $7 million the estate reported. The IRS now wants a total of $525.6 million in tax and $205.1 million in gross valuation misstatement and negligence penalties.” (Any interest owed will be on top of that.)
It is estimated that the Jackson estate has earned more than $700 million since the singer’s death, including: new releases, two Cirque du Soleil shows, the concert film This Is It and an endorsement deal with PepsiCo. At the time of his death, however, the economy was in the dumps and his image was suffering, in part due to allegations of child molestation. It’s the value of his image at death that matters for estate taxes. The estate valued Jackson’s name and likeness at a miniscule $2,105 while the IRS contends they were worth $434 million.
If Michael Jackson had died just seven months later, in 2010 (the year that the federal estate tax was fully repealed), there would be no dispute at all. His estate would owe zero federal estate tax.
Timing is everything.
“I am proud to be paying taxes in the United States. The only thing is, I could be just as proud for half the money.” — Arthur Godfrey, entertainer“I have no use for bodyguards, but I have very specific use for two highly trained certified public accountants.” — Elvis Presley
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