Growth Companies or Empty Shells?

by Hiller Hardie 22. June 2012 11:00
    Two months after the JOBS Act was introduced, many “emerging growth companies” that benefit by reduced SEC and Sarbanes-Oxley compliance burdens, have practically zero employees. According to the Wall Street Journal, a large portion of the companies benefitting from reduced regulation are special-purpose acquisition companies, which are often used in mergers as a backdoor into U.S. stock listings. Watching this unfold is like witnessing a collision for the second time; it’s only been one year since the Chinese reverse-merger collapse, where several Chinese companies saw $18 billion of their capitalization vanish. Only adding to the mix, China announced a plan to gain local control over the Big Four accounting firms operating within its borders. This plan will amplify the problem, because the U.S. Securities and Exchange Commission needs to be able to ensure that listed companies accurately prepare their financial statements. This is difficult when the SEC cannot even gain access to Chinese-based auditors to ensure they are conducting quality audits. As a veteran Senator recently said, “Rather than growing our economy, we are courting the next accounting scandal, the next stock bubble, the next financial crisis.”    
Categories: Advisory

Updated Fee Disclosures - ERISA 408(b)(2)

by Kevin McGarry 21. June 2012 11:35
Effective July 1, 2012, there will be new ERISA 408(b)(2) disclosure rules. The regulation is intended to help plan sponsors/fiduciaries understand the administrative and investment costs being paid from their plan’s assets. Individual plan holders should have received information directly from their plan service providers (TPA’s, record keepers, etc.) that addresses this new regulation. The full article “Final Fee Disclosure Regulation Issued” can be viewed on Urish Popeck’s website.   Additionally, the newly-required annual disclosure of plan-level and investment-level fees and expenses must be provided to participants no later than Aug. 30, 2012. Please visit the Department of Labor page, which summarizes the regulation, and feel free to reach out to Urish Popeck with any questions you may have.
Categories: Advisory

Temporary Regulations Could Be Beneficial

by Tim Marshall 22. February 2012 11:00
  Late in 2011, the Internal Revenue Service released new regulations on the treatment of certain costs incurred relating to tangible property. The new regulations provide guidance on issues such as materials and supplies expenses and safe harbor for routine maintenance expenses on tangible property. These temporary deductions will affect some of the regulations that have been in place since 2008 regarding tangible property. The new rules provide clarity on the following –      What constitutes an improvement to a unit of property      Whether an expense is attributable to a building improvement      Disposition of property      The definition of a unit of property      Revisions to loss recognition rules There is an opportunity for taxpayers to take advantage of these temporary regulations. Costs that would have otherwise been capitalized may qualify as deductible costs under this new regulation. In some cases, a ‘catch – up’ deduction will help taxpayers capture missed deductions in the year of their method change.   
Categories: Tax