Document Sample
					 Accounting & Auditing


By Tammy Whitehouse                             Reducing taxable income in one or more          in 2007. Only 15 percent of respondents
                                                earlier tax years will reduce taxable in-       said absolute return is the most important

C    ompliance Week publishes a blog of the
     latest news from the Financial Account-
ing Standards Board, the Public Company
                                                come in those carryback years, which can
                                                affect the deductions or credits that were
                                                taken in those years, Culp says. Tax staff
                                                                                                metric for measuring plan performance.
                                                                                                   SEI said 70 percent of survey partici-
                                                                                                pants see greater value in a liability-driven
Accounting Oversight Board, and other ac-       should be doing some kind of scheduling         investment strategy as a result of recent
counting industry groups. Below is a recap of   or basic recalculations of earlier tax years    market volatility. Nearly all participants
recent coverage. To see the blog online, view   to decide how best to claim the extended        said they use long-duration bonds as part
the primary source documents cited here, and    carryback opportunity, he says.                 of the liability-driven strategy, though
participate in discussion, please visit www.        Mike Corrente, a managing director          less than half said they use interest rate             with CBIZ Tofias, says companies also           derivatives to achieve the objective.
                                                need to take into account that carrying a          “In the past, plan sponsors had a much
IRS Explains Mechanics                          tax benefit into a settled tax year can re-     more asset-only perspective when mea-
                                                open the tax return to IRS scrutiny, even       suring the success of a portfolio,” says
of One-Time Tax Break                           if statutes of limitation were otherwise        SEI Chief Actuary Jon Waite. “Given the

T    he Internal Revenue Service has is-
     sued guidance on how companies can
claim a refund under a recent Congres-
                                                closed. “If you carry a 2009 loss back to
                                                2004 and get a refund from taxes you paid
                                                that year, the IRS has a right to take an-
                                                                                                losses they’ve incurred in 2008 and 2009,
                                                                                                plan sponsors are now saying ‘how can
                                                                                                we avoid that pain in the future?’ Liability
sional gift—an extension of net operating       other look at that year,” he says.              driven investing is getting a lot more at-
loss carryback provisions to enable com-            In addition to the obvious potential tax    tention after all the ups and downs plan
panies to offset current losses with tax re-    consequences, that leads to some financial      sponsors have suffered in the past 18
funds from prior years.                         reporting consequences as well, Corrente        months.” ■
    While typically companies can carry         says. Companies need to look at those tax
net operating losses back for up to two         years from which it plans to pluck refunds
years, the recent Worker, Homeowner-            and consider if exposure to IRS scrutiny        Congress Asks How Will
ship, and Business Assistance Act of 2009       raises any uncertainties that need to be re-
allows companies to carry losses back as        ported in current financial statements, he      Accounting Affect Credit
far as five years. That gives companies a
greater opportunity to improve current
cash flow by claiming a refund on taxes
                                                says. And as companies consider current
                                                year-end financial reporting, they also
                                                need to assure their deferred tax assets re-
                                                                                                C     ongress is openly fretting over how
                                                                                                      new off-balance sheet accounting
                                                                                                rules might affect securitization and the
paid as far back as five years ago.             flect any plans to claim a refund, he says. ■   availability of credit, with the House Fi-
     “The guidance is fairly simple,” says                                                      nancial Services Comm
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