Saving for a Rainy Day: How Much is Enough?
What is an operating reserve, and why does every nonprofit need to address this issue? Nonprofit reserves are more important now than ever in today’s economy. It is a common misunderstanding that nonprofit organizations should not make a profit. In fact, the goal should be to build a solid base for the organization by accumulating…
Can U.S. and International Fair Value Guidance Agree?
It is a challenge to measure and disclose fair value clearly and consistently, with its tangle of standards and requirements. To add some clarity to the issue, the U.S. and international accounting standards boards recently implemented their converged fair value measurement and disclosure requirements. For public entities, the new guidance began for interim and annual…
Initial Public Offerings: Proceed with Caution
Initial public offerings can generate excitement. But a combination of excitement and volatility should send up caution flares for investors. An initial public offering (IPO) is a tricky investment because no record of public trading serves as a benchmark for estimating share value. While some IPOs yield double-digit and even triple-digit returns, many others don’t,…
IRS Guidance: Is it a Tip or a Surcharge?
The IRS recently issued guidance on the difference between a tip and a service charge. The distinction is important because service charges are considered revenue of the establishment. To the extent that the service charges are, in turn, paid to the employees, that amount is compensation, subject to all payroll taxes and withholdings. The employer’s…
Formula Clauses: Court Decision Shows Their Value
The purpose of a formula clause is to assure that gifts do not exceed the donor’s gift tax exclusion amount, which could result in the payment of gift tax. The Tax Court recently upheld a formula clause designed to control the value of a gift of a difficult-to-value asset in the case of Wandry v. Commissioner (T.C….
Are You Prepared if Disaster Strikes?
By its very definition, insurance is meant to prevent loss in the event of a catastrophic event. However, while the loss of a home, perhaps by fire, is considered a catastrophe on a personal level, catastrophes on a regional scale also exist. Disasters such as Hurricane Katrina, the Tohoku earthquake and tsunami in eastern Japan,…
Flexible Work Arrangements: What, Where & Why
Four out of five couples today have dual careers. Six in ten women with children under age 6 work outside the home. One in five employees provides care to an elderly parent or relative, a number that will more than double in the near future. With statistics like these, it’s no wonder that flexibility at…
Demographics Research: Where to Begin
Having current demographics on your client base is an important part of making your case for services and funding. Many funders, especially the federal government, target the worst-off geographic areas and the most critical issues. Good data will help you decide who your target audience should be. By digging into information about your constituents, you…
Business Value is More Than Dollars and Cents
What is the value of your business? Most people answer that question in terms of the dollar amount they hope they could sell the business for. That’s one definition of value. But, the value of your business can also be expressed in its contribution to the community, employees, customers and vendors. Business owners often “value”…
How to Figure if the New Medicare Tax Affects You
With the Supreme Court’s finding that the 2010 federal healthcare act is constitutional, it’s time to consider one of the revenue-raising provisions of the act and the ways it may affect next year’s tax situation. As a generalization, the net investment income of taxpayers with total income over a certain threshold is subject to a…