iTaxBlog

The Securities and Exchange Commission seems to be leaning toward giving U.S. companies the option of switching to international financial reporting standards (IFRS) rather than mandating conversion as it prepares to release its road map for convergence later this summer.

Speaking this morning at a forum on IFRS, SEC chief accountant Conrad Hewitt said that the road map will address the question of whether U.S. companies should have the option of moving to IFRS, and whether this option should be granted on a phased-in approach, as in the large-company-first approach used in the SEC’s recent XBRL rule-making.

Several key groups and individual players, such as the CFA Institute and accounting expert Jack Ciesielski, oppose giving U.S. companies an IFRS option and simply want a mandate for IFRS adoption. Mr. Ciesielski has recommended giving companies a five-year lead time to adopt IFRS, with a single deadline for adoption. MORE…

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Gasoline prices have hit $4 a gallon, food prices are escalating, and inflation is in the news. However, there is at least one tool that businesses and accounting professionals can use to help turn a negative into a positive.

In an online article on Inc.Com, Joseph E. Stiglitz, winner of the 2001 Nobel Prize in Economics, wrote, “Inflation also presents special problems in terms of accounting, and those who understand those problems can reduce their tax liabilities significantly. Today, most businesses use last-in-first-out, or LIFO, accounting, which subtracts the cost of the latest widget you put in inventory from the cost of the last widget you sold in order to calculate gross profit. Some companies, however, still use first-in-first-out, or FIFO, accounting, which subtracts the cost of the oldest widget in your inventory from the cost of the last widget you sold. In a period of rapid inflation, when the price of widgets is probably on the rise, FIFO companies will appear to be selling their widgets at much higher profit margins than LIFO companies, and their tax liability will be higher as a result. So if you haven’t yet made the switch to LIFO accounting, now is the time to do so.” continue reading…

As inflation rises, CPAs are turning to LIFO accounting

Inflation is in the news. After a more than 15-year hiatus, economists are examining economic data and concluding that inflation is knocking, once again, at America’s front door. While most view inflation by only its clear downsides, there is at least one tool that CPA’s can use to help turn a negative into a positive for businesses: The Last In, First Out (“LIFO”) accounting method. continue reading…

In an effort to provide clients with needed business solutions and as a way of addressing today’s shortage of accountants, CPA firms are creating strategic alliances that allow them to access expertise they might not ordinarily have.

According to one CPA firm partner, “It gives us the resources to better serve our clients.” continue reading…

As a value-added service to our accounting firm partners, SourceCorp provides a Monthly LIFO PPI Report. This exclusive report helps CPA firms see where the tax reduction opportunities are for existing and prospective clients.

To defer federal income tax based upon inventory inflation, CPA firms can use the Last-In-First-Out (LIFO) inventory method especially for manufacturing, wholesale/distributor, and retailer clients.

Client Industry Opportunities
Click here to review the March PPI “mined” for inflation, grouped by industry with specific categories at the 4-digit PPI level (NOTE: the PPI categories are published by the Bureau of Labor Statistics and start at a 2-digit industry level and continue down to an 8-digit very specific product category). The most obvious opportunities are in the following industries:

* Chemicals and allied products (paint, pharmaceuticals, plastic resins)
* Rubber and plastic products
* Building materials
* Metal and metal products
* Nonmetallic mineral products (concrete, asphalt)
* Some categories of furniture
* Machinery and equipment
* Transportation equipment
* Fuels and related products
* Various miscellaneous products

For more information, please visit SourceCorp at: SourceCorpTax.com

IRS reverses course on dealership LIFO pooling after three decades Revenue Procedure 2008-23 – Vehicle Pool Method

Vehicle Pool Benefits & Opportunities

Confusion over which LIFO pool SUVs, mini-vans, and crossovers should be included in is finally over. With the release of Rev. Proc. 2008-23, auto dealerships may now group all light-duty vehicles (cars, trucks and crossovers) in one LIFO pool.

This new pooling method should help prevent dealerships from liquidating LIFO layers if the recent shift to selling more crossover vehicles and trucks reverses itself and dealerships return to selling more cars. continue reading…

Inventory costs are rising (i.e., there is inflation) and LIFO accounting provides a more accurate way of measuring financial performance and calculating tax.

Inflation is in the news. After a more than 15-year hiatus, inflation’s return has been documented in recent months by nearly every business journal in the nation. Economists are examining economic data and concluding that inflation is knocking, once again, at America’s front door. While most view inflation by only its clear downsides, there is at least one tool that CPA’s can use to help turn a negative into a positive for businesses: The Last In, First Out (“LIFO”) accounting method. continue reading…