Weinberg & Company

              Certified Public Accountants

SIMPLY STATED

FEBRUARY 2017

ACCOUNTING NEWS

Ready for new Revenue Recognition Rules?
 
Although the new revenue management guidelines – ASC 606 Revenue from Contracts with Customers won’t become effective until 2018 for public companies (2019 for private companies), now is the time to begin preparing for the new standard.
According to the American Institute of CPAs, “the new standard has the potential to affect every entity’s day-to-day accounting and, possibly, the way business is executed through contracts with customers.”“The conversion to this new accounting process is at best a major hassle, but the pain will only get worse for those companies that do not plan early,” says Weinberg Managing Partner Corey Fischer, whose bylined article on the subject appears in the current issue of MicroCap Review Magazine and can be read by clicking: http://www.weinbergla.com/3343-2 

Conflict-mineral rule in cross hairs

President Trump is reviewing drafts of a proposed executive action that would create a two year suspension of the conflict-minerals rule – a rule that requires certain industries to investigate and report whether their products contain metals that could have been sold by armed groups. The rule was established under the 2010 Dodd-Frank regulatory-overhaul law and went into effect in 2012.

Acting SEC chair Michael Piwowar said the disclosure requirements have caused a de facto boycott of minerals from parts of Africa. “Legitimate mining operators are facing such onerous costs to comply with the rule that they are being put out of business. It is also unclear that the rule has in fact resulted in any reduction in the power and control of armed gangs or eased the human suffering of many innocent men, women and children in the Congo and surrounding areas,” he said in the statement.

Mnuchin pledges more IRS staff

During his confirmation hearings, then Treasury Secretary nominee Steven Mnuchin said he would increase staff and modernize technology at the IRS, noting that IRS staff has plunged 30% and that the agency lacks internal technology experts to update its systems.

A taxpayer-centric IRS

Calling for the IRS to adopt a more “taxpayer-centric” approach, and for Congress to focus on tax simplification, National Taxpayer Advocate Nina Olson noted that 43% of the IRS’s current $11.2 billion budget is allocated to enforcement, while less than 6% is dedicated to taxpayer outreach and education. The IRS budget request for FY2017 asks for an increase in enforcement funding of 7.2%, and only 3.1% for taxpayer services. “In an enforcement-oriented tax agency, if taxpayers don’t get the help they need to comply and they make a mistake, they are treated as if they are tax evaders,” said Olson. The IRS shouldn’t simply ignore those who are actively evading taxes, but the tax system should be designed around the taxpayers who are trying to comply.

A tax tipster-centric IRS

The IRS’s Whistleblower Office reports that it made 418 awards to tax tipsters in fiscal 2016 – a 322% increase compared to 99 awards paid in fiscal 2015. However, the total dollars awarded declined from $103 million to just $61 million – a clear case of more big whistlers blowing smaller whistles.

MONEY TALKS  

Oh Snap!

To convince investors that a $20-25 billion IPO valuation is justified, Snap Inc. is presenting various stats favorably comparing Snapchat usage to Facebook and Twitter. The WSJ reports that the Snap roadshow presentation will cite its 150 million users that spend on average 25-30 minutes a day on Snapchat. That’s much less than the 1.18 billion Facebook users, but more than some estimates of Twitter’s daily active users. Of course, we must ask: Are those Twitter estimates before or after Donald Trump decided to run for President?

High cost for publics
A 2009 study by the Securities and Exchange Commission found that smaller public firms have a Sarbox cost burden more than seven times those of large public companies.In 2001, the year before Sarbox became law, there were more than 5,100 companies that investors could purchase on exchanges such as Nasdaq and the NYSE. By 2015 there were just 3,700, which is fewer than during the “bear market” year of 1975, when publicly traded stocks numbered more than 4,700, according to John Berlau, a senior fellow at the Competitive Enterprise Institute.

High valued privates

There were a least 154 private companies valued by venture capital firms at $1 billion or more as of January, according to Dow Jones VentureSource, including ride-hailing company Uber Technologies Inc. and room-rental website Airbnb Inc.

Portlandia: locally sourced tax 

The Oregonian reports that the Portland City Council approved a first-of-its-kind tax on public companies that pay their chief executives vastly more than they pay an average worker. The tax targets publicly traded companies whose chief executives report salaries at least 100 times higher than the salary of a median worker. Under the tax plan, a company with a CEO-to-worker ratio of at least 100-to-1 will pay a surcharge equal to 10 percent of the amount it pays for Portland’s business tax. A company with a 250-to-1 ratio or greater would pay a 25 percent surcharge.

Playing games

Smartphone and tablet users spent a record $967.6 million on game apps for iOS and Android devices between Christmas and New Year’s, up 53% from a year ago, according to Sensor Tower Inc. Games for smartphones and tablets generated $36.9 billion in revenue worldwide in 2016, compared with $31.9 billion for computer games and $30.8 billion for console games, according to Newzoo BV.

Aging is popular

You know you’re getting old when people stop telling you that you look great, instead saying, “you look good for your age.” A growing senior population is adding pressure to the Social Security and Medicare entitlement programs. Ten years ago around 6,700 Americans turned 65 every day. It’s now about 9,800. It is expected to be about 11,700 by 2026, leading to the conclusion that aging is very popular — or maybe it’s just better than the alternative.

QUOTABLE

Free Speech

They ought to put an amendment to the First Amendment that says there shall also be freedom of hearing.
Tom Smothers 
 

If we don’t believe in freedom of expression for people we despise, we don’t believe in it at all.
Noam Chomsky  

I never considered a difference of opinion in politics, in religion, in philosophy, as cause for withdrawing from a friend.
Thomas Jefferson  

I’m all in favour of free expression provided it’s kept rigidly under control.
Alan Bennett

WEINBERG & COMPANY

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

1925 Century Park East, Suite 1120  

Los Angeles, CA 90067

(310) 601-2200

6100 Glades Road, Suite 205

Boca Raton, FL 33434

(561) 487-5765  

Room 2109, 21/F, Shui On Centre

6-8 Harbour Road, Wanchai, Hong Kong P.R.C.

DISCLAIMER:
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.
Quick Links

Corey Fischer
Firm Managing Partner

310-601-2200

CoreyF@weinbergla.com

Jeffrey B. Engler
Director of Tax,
Los Angeles 

310-601-2200
JeffreyE@weinbergla.com

Bruce Weinberg
Florida Managing Partner

561-487-5765

________________________

SERVICES

Assurance & Audit
Tax & Accounting
Consulting
Private Client
Business Management

INDUSTRY EXPERTISE 

Consumer Goods
Apparel
Distribution
Leisure Time Industries
Life Sciences
Media & Entertainment
Manufacturing
Real Estate
Technology
______________________

 

To show sotck chart