Mr. Thomas Klein CPA

GLG News by Mr. Thomas Klein CPA, Managing Member

GLG News is now G+ Insights

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Obama Expected to Sign Generous NOL Carryback Bill on Friday

November 5, 2009

Analysis of:Congress Passes Unemployment Bill With Tax Items | www.journalofaccountancy.com

On Thursday, Congress sent a bill to the White House containing enhanced net operating loss (NOL) carryback opportunities for most companies. The bill contains a provision extending the NOL carryback period from two years to five years for losses incurred in 2008 or 2009. President Obama is expected to sign the bill on Friday which would result in the immediate filing for refunds by many companies.

Obama Administration Moves Foreign Earnings Tax Deferral Reform to Back Burner

October 13, 2009

Analysis of:Business Fends Off Tax Hit | online.wsj.com

Once again, a proposal to reform how a U.S. based multinational company's foreign earnings are taxed has failed to gain congressional support. Similar proposals introduced over the past twenty years have consistently failed to gain traction. The current proposal was part of the Obama administration's fiscal year 2010 budget which made reference to additional tax revenues in excess of $200 billion related to the reform of corporate taxation on foreign earnings.

Security Writedowns Today May Lead to Massive P&L Charges Later for C, MER and Others

April 21, 2008

Analysis of:A Way Charges Stay Off Bottom Line | online.wsj.com

Depending upon management's classification of a security (i.e., either "trading" or "available for sale"), a charge may or may not appear on the income statement in the same period as the write-down on the balance sheet. If the security is classified as a trading security, the charge on the income statement will occur in the same period as the write-down. However, if the security is classified as available for sale, the charge bypasses the income statement and is taken directly to stockholders equity. If the value of the security does not recover prior to its liquidation, the charge typically is taken in the year of liquidation. The potential charge for write-downs related to available for sale securities can be quantified by looking at the statement of stockholders equity, particularly other comprehensive income.

Investors Punish GM Stock, in Part on Large Deferred Tax Adjustment.

November 7, 2007

Analysis of:GM Posts Huge Loss | online.wsj.com

Investors fled General Motors following the release of its Q3 results.  The reported loss for the quarter was $38.96 billion of which 99% of the loss ($38.6 billion) resulted from the write-down of deferred tax assets.  Have investors overreacted to the noncash charge or is the decline in market value justified?

Despite Protests, FASB Will Not Defer Effective Date of New Tax Accounting

January 17, 2007

Analysis of:FASB to Implement Tax Changes Without Delay | www.msnbc.msn.com

The FASB received over 400 letters representing more than 1,000 companies’ concerns about implementation issues related to FASB Interpretation #48 (FIN 48).  The vast majority of the letters requested a deferral of the effective date of the new Interpretation; fiscal years beginning after December 15, 2006 (i.e., the quarter ending December 31, 2007 for calendar year companies).  The FASB voted overwhelmingly not to defer the effective date.  This means that most companies' financial statement will be affected beginning Q1 of 2007.

FASB to Consider Deferral of New Tax Accounting for Uncertain Tax Positions

January 16, 2007

Analysis of:FASB Weighs One-year Delay for FIN 48 | www.cfo.com

FASB Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes, is scheduled to become effective for a company's first quarter beginning after December 15, 2006 (i.e., the quarter ended 3/31/07 for calendar year companies).  The FASB announced today that it will consider deferring the effective date by one year when it meets on January 17, 2007.  The possible delay was likely prompted by numerous concerns that have been expressed to the FASB by hundreds of companies.  Implementation of FIN 48 will impact most companies' balance sheets, earnings and cash flows.

2007 Q-1 Marks First Quarter Accounting for Uncertain Tax Positions Becomes Effective

January 9, 2007

Analysis of:Uncertainty Reigns Over Taxes | www.cfo.com

FASB Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes, becomes effective in a company's first quarter beginning after December 15, 2006 (i.e., the quarter ended 3/31/07 for calendar year companies).  Adoption of the new interpretation will have an immediate impact on most companies balance sheets; in some cases, a material impact.  Thereafter, earnings will likely be impacted as well.  The long-term impact on earnings is still unknown.  Companies that are less aggressive from a tax perspective will see less of an impact on earnings; those that have been more aggressive will likely see a greater impact on earnings (i.e., a reduction in earnings).  In addition to the balance sheet and statement of earnings impact, companies will also have to provide far more information regarding its tax strategies in its income tax footnote.

Adverse Tax Consequences of Option Backdating Becoming More Evident

November 9, 2006

Analysis of:UnitedHealth expects bigger charges due to options | www.bizjournals.com

Restatement charges for option backdating were initially perceived to be a largely noncash adjustment to earnings.  However, it is becoming apparent that the backdating may result in very significant tax liabilities, with a material impact on a company's cash flows.

Impending Homebuilder Impairment Charges Make Bad Situation Worse

August 2, 2006

Analysis of:Builders get caught in squeeze on land values | www.azstarnet.com

The softening housing market is putting a strain on homebuilder earnings.  To make matters worse, many homebuilders are poised to record impairment charges on their recent land purchases, which will further strain earnings.  These charges are required when the expected return on these land investments is less than the current recorded value on the company's balance sheet.  Therefore, homebuilders with significant land purchases over the past 12 to 24 months will be impacted the most.

How Stock Repurchase Programs Create Economic Value for Shareholders

August 2, 2006

Analysis of:Microsoft Reports Fourth Quarter Results and Announces Share Repurchase Program | biz.yahoo.com

The initiation of a stock repurchase program suggests that the company believes its shares are undervalued. Furthermore, it is, in effect, a tax efficient way of purchasing company stock on behalf of its shareholders.

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