Weinberg & Company

              Certified Public Accountants




Non-GAAP reporting

According to a recent Audit Analytics report, approximately 88 percent of S&P companies use non-GAAP measures to communicate financial performance, with the vast majority of those adjusted measures resulting in a positive effect on net income.

The use of “non-GAAP” measures is extremely common in financial reporting today, but can result in unwanted regulatory and media scrutiny according to Financial Executives International (FEI). The SEC has flagged non-GAAP measures as an extra area of emphasis and has indicated that more rule-making or interpretive guidance may be coming.

While the use of non-GAAP measures is common, it’s important to understand the implications and risk associated with disclosing non-GAAP measures, cautions FEI. Complying with the SEC’s non-GAAP requirements protects a company from regulatory scrutiny  [Related reading: Non-Cash Costs Can Sink the Ship]

Think long term… like maybe 1 year
The Securities and Exchange Commission staff is weighing the pros and cons of continuing to require quarterly financial reports, according to Keith Higgins, director of the agency’s Division of Corporation Finance and reported by Bloomberg BNA. Though no formal recommendation to the commission is eminent, pro advocates say the quarterly frequency leads to short-term thinking by both investors and corporate management, and that changing the rules could be “especially appropriate” for smaller issuers because of the burden of having to provide financial statements every three months.


Tough year for Asset Managers

 2015 was not a great year for asset managers. By year’s end, investors took $200 billion out of actively managed funds while investing more than $400 billion into index-tracking funds according to Morningstar Inc. and reported by the WSJ. Shares in publicly traded asset-management firms tracked by Morningstar fell an average 18% last year.  

Leaving it behind

There was a time that when you left your job, you were not so subtly encouraged to take your 401(k) with you. Times have changed. A growing number of companies are now encouraging outgoing employees to keep their retirement money parked after they retire.  Driving the change, according to a Wall Street Journal analysis is corporate concern that mass baby boomer retirements will yank trillions of dollars of assets out of corporate plans – hurting the company’s leverage to negotiate lower fees with the money managers that run their retirement savings plans.  

According to the Journal, baby boomers hold about $4 trillion in defined-contribution retirement plans.  Good for companies that can hang on to those dollars – not so good for financial advisers who were waiting in the wings for the tide of baby boomer retiree money to come their way for reinvestment.  

IPOs tank in Q4

There were 44 initial U.S. public offerings during the fourth quarter of 2015; a 45% decrease compared to 80 IPOs for the same period a year earlier. The total amount raised was $7.9 billion, compared to $17 billion for the same period a year earlier.


Here’s the scoop.  Ben Cohen, co-founder of Ben & Jerry’s ice cream, has come up with a new flavor to support 2016 Democratic presidential hopeful, Bernie Sanders.  The new flavor named “Bernie’s Yearning” was created in Ben’s kitchen and packaged under the “Ben’s Best” label.  (Ben and Jerry’s founders sold out their company to corporate giant Unilever some 16 years ago for $326 million.)  

Ben’s personal Facebook page announced, “Nothing is so unstoppable as a flavor whose time has finally come.”  He explains: plain mint ice cream topped by a chocolate disk represents “the huge majority of economic gains that have gone to the top 1% since the end of the recession. Beneath it, the rest of us,” according to the description.

Less enthusiastic, Unilever immediately distanced itself in a Twitter feed that read “this was created by Ben as a citizen. The company is not involved.”

With only 40 pints produced, 25 of which he donated to the Sanders campaign, this is obviously a frozen asset, generating no fat revenues for the one-percenter Ben Cohen.  

But, in keeping with Sanders’ Socialist philosophy, shouldn’t wealthy Ben produce enough ice cream for everyone?  Ya know, free for the masses?  

Well, you can count us out!  You can’t buy our support with sugary utopian promises.  No!  Not us!  Never!  Unless it’s Chunky Monkey.  Everyone has their price.


Disruptive financing 

Music lost a great one. David Bowie, British singer, songwriter, multi-instrumentalist, record producer, painter, and actor, passed away last month, leaving a career that spanned over five decades and selling over 140 million records worldwide. The Rock and Roll Hall of Famer also made financial history.

Bowie was the first musician to securitize the then current and future royalties from 287 songs that he recorded and of which he fully owned the rights.  Issued in 1997, the 10-year asset-backed security paid 7.9% interest, better than the 6.37% offered on 10-year Treasury Notes at the time.  Dubbed Bowie Bonds, the securities were bought by Prudential Financial.  Forgoing ten years’ worth of royalties, Bowie raised $55 million in the offering.  Lower than expected royalties in the years to follow resulted in a drop in the bond’s ratings, but the bonds liquidated in 2007 as planned without default, with the underlying music rights reverting to Bowie.

The landmark transaction spawned a flurry of like deals for other artists including James Brown and Marvin Gaye.  But its real impact was that it opened a growing market for other asset-backed securities in which Wall Street sold bonds backed by cashflows from everything from coal plants to sports teams.  

Paying for disruptive financing

Goldman Sachs Group made history, but not in a good way.  Last month the Wall Street firm agreed to pay a $5 billion penalty to settle federal and state claims resulting from the firm’s sale of mortgage bonds sold between 2005 and 2007.  Goldman joins J.P. Morgan Chase, Bank of America and Citigroup that negotiated multibillion-dollar settlements with the government. The government probes centered on whether banks deceived investors by misrepresenting the quality of underlying loans within mortgage-backed securities.

Settlements by banks, mortgage firms, brokerages and others now total over $181.1 billion, according to a recent analysis by Jeff Nielsen, a managing director at Navigant, a litigation consulting firm, reports the WSJ.  Add to that, just last week, it was reported that Morgan Stanley agreed to pay $3.2 billion to settle Justice Department civil charges over the quality of mortgage bonds it sold prior to the 2008 financial crisis.


Making America (real estate) great again

Presidential hopeful Donald Trump sold his Manhattan penthouse for $21 million, reports Zillow Porchlight.  The 6,200-square-foot apartment on the 24th floor of his 32-story Trump Park Avenue tower was originally listed for $35 million.  Trump never lived there, according to listing agent Michelle Griffith of Trump International Realty.  Accessed via private elevator, the unit has 5 bedrooms and 7.5 baths with luxurious details including: custom moldings, a kitchen with marble floors and counter tops, and brass doorknobs from Italy (not China).  

Long way from Alaska, don’t-cha know 

2008 Republican vice presidential nominee, Sarah Palin is selling her equestrian estate in Scottsdale, Arizona according to Zillow Porchlight.  Palin bought the home in 2011 for $1.7 million.  It is listed for $2.5 million.  

The 5-acre gated property in the Pinnacle Peak area includes equestrian facilities and all the amenities of a 5-star resort.  The 6 bedroom 6.5 bath home includes a wine cellar, media room, lighted sports court, putting green, pool, spa, outdoor entertainment area, six car garage and a synthetic lawn to save water.  Also, there’s a rooftop deck atop the master suite with phenomenal views — though we’re pretty sure you cannot see Russia from there.   

Dropping like a little rock 

Former 2016 presidential hopeful and former Arkansas governor Mike Huckabee has again listed his Little Rock home for sale, this time dropping the price to $674,900.  It has been listed several times in the past year starting at $850,000, according to Zillow Porchlight, that reports that Huckabee paid $525,000 for the 5 bedroom, 6 bathroom, 6,473 square-foot home in 2006.  The park-like yard backs to a creek, has a deck, covered patio and saltwater pool.  

Huckabee first listed the home in 2013, after building a $3-million mansion in Florida.  While running for president, we presume he came back to Arkansas to maintain residency – or maybe Florida just wasn’t big enough for him, and fellow Floridians Jeb Bush, Marco Rubio, and Ben Carson.

Success is getting and achieving what you want. Happiness is wanting and being content with what you get.     
Bernard Meltzer, talk radio host (1916-1998)

Simply the right choice


Weinberg & Company is a leading, international, full service, multi-office CPA firm serving clients throughout the United States and the Pacific Rim. Founded over two decades ago, the practice groups include: Assurance and Audit, Tax and Accounting, and Advisory Services. Weinberg has a depth of knowledge and experience to meet the needs of both public and privately held companies, high net worth individuals, entrepreneurs, family offices, and can provide customized business management services. www.weinbergla.com

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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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Corey Fischer
Firm Managing Partner



Jeffrey B. Engler
Director of Tax,
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Bruce Weinberg
Florida Managing Partner




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