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FAQs About Fair Value in Accounting

Posted by Stacey Monson on May 3, 2022 6:42:29 PM

In recent years, accounting rule makers have issued guidance that requires certain items on the balance sheet to be reported at “fair value.” Here are some answers to frequently asked questions about this standard of value and how it’s measured.

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Goodwill in a Bad Economy

Posted by Stacey Monson on May 3, 2022 6:36:46 PM

In today’s volatile economy, many businesses and nonprofits have been required to write down the value of acquired goodwill on their balance sheets. Others are expected to follow suit — or report additional write-offs — in 2022. To the extent that goodwill is written off, it can’t be recovered in the future, even if the organization recovers. This makes impairment testing is a serious endeavor that usually requires input from your CPA to ensure accuracy, transparency, and timeliness.

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Topics: Audit & Assurance

Power Up Your Trust With Crummey Powers

Posted by Melanie Abigania and Jessica Simons on Apr 25, 2022 12:23:43 PM

The unified gift and estate tax exemption is set at an inflation-adjusted $12.06 million for 2022, up from $11.7 million for 2021. This means that for many families, estate tax liability isn’t a factor. However, for others, the annual gift tax exclusion continues to be an important estate planning strategy — especially since future tax law changes could lower the gift and estate tax exemption. For this reason, using a Crummey trust in your estate plan remains an important estate planning strategy. Here’s why.

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Topics: Tax, Estate Planning, High Net Worth

What Estate Planning Strategies Are Available For Non-U.S. Citizens?

Posted by Melanie Abigania and Jessica Simons on Apr 25, 2022 12:23:09 PM

Are you, or is your spouse, a non-U.S. citizen? If so, several traditional estate planning techniques won’t be available to you. However, if you’re a U.S. resident, but not a citizen, the IRS will treat you similarly to a U.S. citizen.

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Topics: Estate Planning

Careful Planning Required For Beneficiaries to Borrow From a Trust

Posted by Melanie Abigania and Jessica Simons on Apr 25, 2022 12:22:35 PM

Intrafamily loans allow you to provide financial assistance to loved ones — often at favorable terms — while potentially reducing gift and estate taxes. But what about families that lack the liquid assets to make such loans? Are there other options if they have a trust?

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Topics: Tax, Estate Planning

Employee Benefit Plans - Applying the Liquidation Basis of Accounting

Posted by Ian Dornfeld on Apr 18, 2022 5:50:34 PM

In the wake of the pandemic, with bankruptcy and business closures rising to record levels, it is not uncommon to see a relative increase in employee benefit plan (EBP) terminations. In light of these unfortunate events, many questions on how to appropriately account for these terminations have arisen. Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) 205-30, Presentation of Financial Statements: Liquidation Basis of Accounting provides general guidance relative to the application of the liquidation basis of accounting.

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Timing Counts: Reporting Subsequent Events

Posted by Jill Jamison, CPA on Mar 30, 2022 2:53:11 PM

Subsequent eventsMajor events or transactions — such as a natural disaster, cyberattack, regulatory change, or the loss of a large business contract — may happen after the reporting period ends but before financial statements are issued. The decision of whether to report these so-called “subsequent events” is one of the gray areas in financial reporting. Here’s some guidance from the AICPA to help you decide.

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Topics: Audit & Assurance

Eyes on Related Parties

Posted by Jill Jamison, CPA on Mar 30, 2022 2:31:26 PM

Related-PartyBusiness transactions with related parties — such as relatives, parent companies, subsidiaries and affiliated entities — may sometimes happen at above or below market rates. If these transactions are not adequately disclosed, this could be misleading to the users of  your company’s financial statements, because undisclosed related-party transactions may skew the company’s true financial results.

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Topics: Audit & Assurance

Clarity Counts When it Comes to Estate Planning Documents

Posted by Melanie Abigania and Jessica Simons on Mar 21, 2022 6:45:45 PM

Precise language is critical in wills, trusts and other estate planning documents. A lack of clarity may be an invitation to litigation. An example of this is the dispute that arose after Tom Petty’s death, between his widow and his two daughters from a previous marriage. (The two parties have since resolved their differences and dismissed all litigation matters.)

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Topics: Estate Planning

A Beneficiary Designation or Joint Title Can Override Your Will

Posted by Melanie Abigania and Jessica Simons on Mar 21, 2022 6:45:08 PM

Inattention to beneficiary designations and jointly titled assets can quickly unravel your estate plan. Suppose, for example, that your will provides for all of your property to be divided equally among your three children. But what if your IRA, which names the oldest child as beneficiary, accounts for half of the estate? In that case, the oldest child will inherit half of your estate plus a one-third share of the remaining assets — hardly equal.

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