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<br /> New<br /> Ideas<br /> Improving Regulation,<br /> Standards, and Education<br /> Plus<br /> · Subprime Lending and Reliable Reporting<br /> · Lottery Tax Issues · Changes to 529 Plans<br /> <br /> <br /> C ONTENTS<br /> april 2010<br /> 20 Accounting & Auditing<br /> ❙ Financial Reporting<br /> The Subprime Lending Crisis and Reliable Reporting:<br /> Limitations to the Use of Fair Value<br /> in Unstable Markets<br /> By Benjamin P. Foster and Trimbak Shastri<br /> ❙ Financial Reporting<br /> `Stealth' Restatements: An Issue Requiring Attention<br /> By Kevin Hee and Leon Chan<br /> <a title="CPAJ April 2010 page 1" href="http://viewer.zmags.com/publication/900c8238?page=1"> New Ideas Improving Regulation, Standards, and Ed</a> <a title="CPAJ April 2010 page 2" href="http://viewer.zmags.com/publication/900c8238?page=2"> </a> <a title="CPAJ April 2010 page 3" href="http://viewer.zmags.com/publication/900c8238?page=3"> </a> <a title="CPAJ April 2010 page 4" href="http://viewer.zmags.com/publication/900c8238?page=4"> C ONTENTS april 2010 </a> <a title="CPAJ April 2010 page 5" href="http://viewer.zmags.com/publication/900c8238?page=5"> vol. LXXX/no.4 6PERSPECTI</a> <a title="CPAJ April 2010 page 6" href="http://viewer.zmags.com/publication/900c8238?page=6"> Publisher LOUIS GRUMET Associate Pu</a> <a title="CPAJ April 2010 page 7" href="http://viewer.zmags.com/publication/900c8238?page=7"> FAE's Discount Programs Can Save You Money F</a> <a title="CPAJ April 2010 page 8" href="http://viewer.zmags.com/publication/900c8238?page=8"> P ERSPECTIVES viewpoint Proposed Tax Gap Le</a> <a title="CPAJ April 2010 page 9" href="http://viewer.zmags.com/publication/900c8238?page=9"> publisher's column Will the Estate Tax Beco</a> <a title="CPAJ April 2010 page 10" href="http://viewer.zmags.com/publication/900c8238?page=10"> serious problems and propose possible solutions b</a> <a title="CPAJ April 2010 page 11" href="http://viewer.zmags.com/publication/900c8238?page=11"> The Treasury proposes that the general three-y</a> <a title="CPAJ April 2010 page 12" href="http://viewer.zmags.com/publication/900c8238?page=12"> Creating Compelling Client Comm</a> <a title="CPAJ April 2010 page 13" href="http://viewer.zmags.com/publication/900c8238?page=13"> can be convenient, a lengthy game of phone tag ma</a> <a title="CPAJ April 2010 page 14" href="http://viewer.zmags.com/publication/900c8238?page=14"> value, quality, and overall satisfaction with the</a> <a title="CPAJ April 2010 page 15" href="http://viewer.zmags.com/publication/900c8238?page=15"> practice management Success Starts with a </a> <a title="CPAJ April 2010 page 16" href="http://viewer.zmags.com/publication/900c8238?page=16"> In Focus New Ideas Regulation, 1</a> <a title="CPAJ April 2010 page 17" href="http://viewer.zmags.com/publication/900c8238?page=17"> for Improving Standards, and Education An An</a> <a title="CPAJ April 2010 page 18" href="http://viewer.zmags.com/publication/900c8238?page=18"> TAC's report furnished 18 recommen- dations, w</a> <a title="CPAJ April 2010 page 19" href="http://viewer.zmags.com/publication/900c8238?page=19"> Specifically, CIFR recommended addi- tional inves</a> <a title="CPAJ April 2010 page 20" href="http://viewer.zmags.com/publication/900c8238?page=20"> use of these indicators in published finan- cial </a> <a title="CPAJ April 2010 page 21" href="http://viewer.zmags.com/publication/900c8238?page=21"> The cochairs further recommended that Congress co</a> <a title="CPAJ April 2010 page 22" href="http://viewer.zmags.com/publication/900c8238?page=22"> A CCOUNTING & AUDITING financial reporting </a> <a title="CPAJ April 2010 page 23" href="http://viewer.zmags.com/publication/900c8238?page=23"> as a “fair value hierarchy” that prioritizes the </a> <a title="CPAJ April 2010 page 24" href="http://viewer.zmags.com/publication/900c8238?page=24"> pronouncements relating to fair value meas</a> <a title="CPAJ April 2010 page 25" href="http://viewer.zmags.com/publication/900c8238?page=25"> support of fair value may be difficult and costly</a> <a title="CPAJ April 2010 page 26" href="http://viewer.zmags.com/publication/900c8238?page=26"> 2007 (Stephen G. Ryan, “Accounting in and for the</a> <a title="CPAJ April 2010 page 27" href="http://viewer.zmags.com/publication/900c8238?page=27"> returns in 2007 (in the midst of the lending cris</a> <a title="CPAJ April 2010 page 28" href="http://viewer.zmags.com/publication/900c8238?page=28"> A CCOUNTING & AUDITING financial reporting </a> <a title="CPAJ April 2010 page 29" href="http://viewer.zmags.com/publication/900c8238?page=29"> pany if that company has future financial reporti</a> <a title="CPAJ April 2010 page 30" href="http://viewer.zmags.com/publication/900c8238?page=30"> each accounting issue into one of four groups: 1)</a> <a title="CPAJ April 2010 page 31" href="http://viewer.zmags.com/publication/900c8238?page=31"> Because stealth restatements can be con- strued a</a> <a title="CPAJ April 2010 page 32" href="http://viewer.zmags.com/publication/900c8238?page=32"> T AXATION federal taxation </a> <a title="CPAJ April 2010 page 33" href="http://viewer.zmags.com/publication/900c8238?page=33"> ence” of gambling to political pressure from othe</a> <a title="CPAJ April 2010 page 34" href="http://viewer.zmags.com/publication/900c8238?page=34"> EXHIBIT 1 Participants in Mult</a> <a title="CPAJ April 2010 page 35" href="http://viewer.zmags.com/publication/900c8238?page=35"> States are required to give the winner 60 day</a> <a title="CPAJ April 2010 page 36" href="http://viewer.zmags.com/publication/900c8238?page=36"> EXHIBIT 2 State</a> <a title="CPAJ April 2010 page 37" href="http://viewer.zmags.com/publication/900c8238?page=37"> ■ Ohio—multiple winners are allowed; they shoul</a> <a title="CPAJ April 2010 page 38" href="http://viewer.zmags.com/publication/900c8238?page=38"> EXHIBIT 3 Anonymity for Winners State </a> <a title="CPAJ April 2010 page 39" href="http://viewer.zmags.com/publication/900c8238?page=39"> Anonymity Most states do not allow a lottery w</a> <a title="CPAJ April 2010 page 40" href="http://viewer.zmags.com/publication/900c8238?page=40"> T AXATION federal taxation Like-Kind 1031 </a> <a title="CPAJ April 2010 page 41" href="http://viewer.zmags.com/publication/900c8238?page=41"> given in the exchange. Thus, if the value of the </a> <a title="CPAJ April 2010 page 42" href="http://viewer.zmags.com/publication/900c8238?page=42"> Generally, property that is listed under a prod- </a> <a title="CPAJ April 2010 page 43" href="http://viewer.zmags.com/publication/900c8238?page=43"> leases of real property are not considered to be </a> <a title="CPAJ April 2010 page 44" href="http://viewer.zmags.com/publication/900c8238?page=44"> T AXATION corporate taxation Tax Benefits </a> <a title="CPAJ April 2010 page 45" href="http://viewer.zmags.com/publication/900c8238?page=45"> IRC section 331(a) apply, and sharehold- ers A an</a> <a title="CPAJ April 2010 page 46" href="http://viewer.zmags.com/publication/900c8238?page=46"> Formless Conversion If the shareholders use t</a> <a title="CPAJ April 2010 page 47" href="http://viewer.zmags.com/publication/900c8238?page=47"> </a> <a title="CPAJ April 2010 page 48" href="http://viewer.zmags.com/publication/900c8238?page=48"> T AXATION federal taxation New Federal Tax</a> <a title="CPAJ April 2010 page 49" href="http://viewer.zmags.com/publication/900c8238?page=49"> of 2009, will help both those who are buy- ing an</a> <a title="CPAJ April 2010 page 50" href="http://viewer.zmags.com/publication/900c8238?page=50"> F INANCE personal financial planning Sec</a> <a title="CPAJ April 2010 page 51" href="http://viewer.zmags.com/publication/900c8238?page=51"> Prepaid tuition plans. A prepaid tuition plan </a> <a title="CPAJ April 2010 page 52" href="http://viewer.zmags.com/publication/900c8238?page=52"> securities. As a result, investors often have dif</a> <a title="CPAJ April 2010 page 53" href="http://viewer.zmags.com/publication/900c8238?page=53"> ciary of accounts holding millions of dol- lars. </a> <a title="CPAJ April 2010 page 54" href="http://viewer.zmags.com/publication/900c8238?page=54"> F INANCE personal financial planning The</a> <a title="CPAJ April 2010 page 55" href="http://viewer.zmags.com/publication/900c8238?page=55"> in taxable income any pretax assets that are conv</a> <a title="CPAJ April 2010 page 56" href="http://viewer.zmags.com/publication/900c8238?page=56"> of the year as the numerator, and the total value</a> <a title="CPAJ April 2010 page 57" href="http://viewer.zmags.com/publication/900c8238?page=57"> tax contributions and their earnings are con- sid</a> <a title="CPAJ April 2010 page 58" href="http://viewer.zmags.com/publication/900c8238?page=58"> a Roth IRA or simply decides that he does not wan</a> <a title="CPAJ April 2010 page 59" href="http://viewer.zmags.com/publication/900c8238?page=59"> All conferences now being webcast— visit our webs</a> <a title="CPAJ April 2010 page 60" href="http://viewer.zmags.com/publication/900c8238?page=60"> M ANAGEMENT practice management Attrac</a> <a title="CPAJ April 2010 page 61" href="http://viewer.zmags.com/publication/900c8238?page=61"> ■ The office was pretty plain and dark. It didn</a> <a title="CPAJ April 2010 page 62" href="http://viewer.zmags.com/publication/900c8238?page=62"> Prepare for new staff's first day on the job. </a> <a title="CPAJ April 2010 page 63" href="http://viewer.zmags.com/publication/900c8238?page=63"> R ESPONSIBILITIES & LEADERSHIP education </a> <a title="CPAJ April 2010 page 64" href="http://viewer.zmags.com/publication/900c8238?page=64"> Importance is defined here as the extent to</a> <a title="CPAJ April 2010 page 65" href="http://viewer.zmags.com/publication/900c8238?page=65"> Certified Management Accountant (CMA) designation</a> <a title="CPAJ April 2010 page 66" href="http://viewer.zmags.com/publication/900c8238?page=66"> so that the changes do not result in an exam- ina</a> <a title="CPAJ April 2010 page 67" href="http://viewer.zmags.com/publication/900c8238?page=67"> Impact of Academics Academic respondents repr</a> <a title="CPAJ April 2010 page 68" href="http://viewer.zmags.com/publication/900c8238?page=68"> T ECHNOLOGY the cpa & the computer For</a> <a title="CPAJ April 2010 page 69" href="http://viewer.zmags.com/publication/900c8238?page=69"> able over the past several months. It shows the m</a> <a title="CPAJ April 2010 page 70" href="http://viewer.zmags.com/publication/900c8238?page=70"> EXHIBIT 2 Matrix of Transition </a> <a title="CPAJ April 2010 page 71" href="http://viewer.zmags.com/publication/900c8238?page=71"> After calculating these transition and col- l</a> <a title="CPAJ April 2010 page 72" href="http://viewer.zmags.com/publication/900c8238?page=72"> cast the future collection of the accounts receiv</a> <a title="CPAJ April 2010 page 73" href="http://viewer.zmags.com/publication/900c8238?page=73"> time-series methods to improve the fore- casting </a> <a title="CPAJ April 2010 page 74" href="http://viewer.zmags.com/publication/900c8238?page=74"> T ECHNOLOGY what to bookmark </a> <a title="CPAJ April 2010 page 75" href="http://viewer.zmags.com/publication/900c8238?page=75"> Accounting Standards Updates, Concepts Statements</a> <a title="CPAJ April 2010 page 76" href="http://viewer.zmags.com/publication/900c8238?page=76"> Classified PROFESSIONAL OPPORTUNITY l BUSINESS l</a> <a title="CPAJ April 2010 page 77" href="http://viewer.zmags.com/publication/900c8238?page=77"> SPACE FOR RENT AAA PROFESSIONAL OFFICES FOR REN</a> <a title="CPAJ April 2010 page 78" href="http://viewer.zmags.com/publication/900c8238?page=78"> FINANCIAL ACCOUNTING & AUDITING SERVICES Experi</a> <a title="CPAJ April 2010 page 79" href="http://viewer.zmags.com/publication/900c8238?page=79"> Classified Rates Rates</a> <a title="CPAJ April 2010 page 80" href="http://viewer.zmags.com/publication/900c8238?page=80"> </a> <a title="CPAJ April 2010 page 81" href="http://viewer.zmags.com/publication/900c8238?page=81"> E CONOMIC & MARKET D ATA monthly update</a> <a title="CPAJ April 2010 page 82" href="http://viewer.zmags.com/publication/900c8238?page=82"> E DITORIAL a message from the editor-in-chie</a> <a title="CPAJ April 2010 page 83" href="http://viewer.zmags.com/publication/900c8238?page=83"> </a> <a title="CPAJ April 2010 page 84" href="http://viewer.zmags.com/publication/900c8238?page=84"> </a>