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10 posts from July 2016

Buying a Home? You May Have Missed an Important Step


Shutterstock_164412314Anyone who is going through the process of buying a home knows that it can be a long and expensive process. And it’s one that you need to get right to build a solid financial future. From finding the right realtor to determining the most important factors for your next home, there are many important steps to take. Luckily, 360 Degrees of Financial Literacy and Feed the Pig are here to help. Here are four essential tips (including one many people overlook) to help you with the home-buying process:

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7 Models to Consider When Implementing the FASB’s New Credit Losses Standard


Shutterstock_408188569The Financial Accounting Standards Board has finalized its credit loss standard, Accounting Standards Update 2016-13—Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard marks the end of accounting for credit losses using the Incurred Credit Loss model and replaces it with the Current Expected Credit Loss (CECL) model. The standard will have a significant impact on financial institutions. Additionally, it will apply to most debt instruments, trade receivables, lease receivables, reinsurance receivables, financial guarantee contracts and loan commitments.

Since the FASB did not restrict the type of methodologies institutions can use when implementing the new standard, I recommend that CPAs working at financial institutions, along with CPAs with financial institution clients, begin reviewing the different models now. You will want to consider the specific portfolio makeup of your or your clients’ institutions when deciding which method will work best. Here are some of the more common models currently in use by financial institutions that can be modified and used under the new standard:

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5 Steps to Increase Effectiveness for Not-for-Profit Leaders

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At AICPA’s Not-for-Profit Industry Conference, keynote speaker Barry Melancon, President and CEO of AICPA joined a panel that included Michael Forster, CFO of Woodrow Wilson International Center for Scholars; Carolyn Mollen, CFO of Independent Sector; and Joe Stradinger, founder of EdgeTheory. The panel was moderated by Lou Mezzina of KMPG LLP.

Financial professionals face ever-changing business and regulatory challenges that necessitate a wider range of skills and competencies. This was a topic of discussion at this year’s AICPA Not-for-Profit Industry Conference. Outlined below are five ways to run your not-for-profit more effectively, inspired by our panel of nonprofit executives.

  • Connect the mission with strategy. A not-for-profit’s success is measured not just by the strength of its balance sheet, but by its ability to execute its mission. . Keep in mind that mission-related decisions have financial implications. Before deciding on a fundraising campaign or a revamp to your program design, consider if the effort is fiscally sound and if it will bring you closer to achieving your mission. Because finance and mission goals are inseparable, leaders must have a deep understanding of operational complexities.
  • Think holistically. Leading change requires more than just technical skills. Today’s financial leaders need to be adept communicators and adaptable in order to bring about transformation. Delivering results in a fast-paced environment means focusing on both preserving financial viability and thinking holistically about strategies needed to drive results. Many Chief Financial Officers report spending the majority of their time tackling big picture issues rather than detail oriented technical ones.

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Passion for Performance: A CGMA’s Perspective

Lindsey Branston for AICPA_074Lindsey Branston, CPA, CGMA, is director of financial operations for the 70,000-member BMW Car Club of America and director of finance for the club’s charitable foundation in Greenville, S.C.

What’s your passion?

I’ve been fortunate to join an organization where my passion for strategy and financial analysis fit hand in glove with my love for cars and driving. As a CGMA, I know many financial strategies work on paper, but success depends on a deep understanding of how the club operates and of our members’ needs and desires. Our members are BMW enthusiasts—I’m one too. I go to car events all over the world to keep my finger on the pulse of BMW owner culture. Both my husband and I drive BMWs: an X5 SUV and a 435 convertible. Like many of our members, there’s a car I dream about owning. For me it’s an E9, a coupe built from 1968 to 1975.

How did you end up in a finance job for BMW?

When I was in public accounting, I worked with the BMW Car Club doing their audits. Then I started my own accounting firm and contracted with the club to provide financial management services. Since becoming a CGMA, I’ve expanded the work that I’ve done with the club and the foundation.

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3 Things to Keep When You Tackle Clutter

Shutterstock_375900517The world now seems chockful of tips to streamline your desk, your home and even your life. This isn’t a bad thing. For CPAs, the files pile up fast. Not to mention the articles, notes, e-mails and phone messages.

At home, the challenge to keep a grip on all the stuff can be even bigger with old clothes, shoes, sports equipment, tchotchkes and other stuff.  The cappuccino maker that your brother-in-law bought you is collecting dust but you feel guilty giving it away.  Or, in the case of my parents, it was books, tons of them. “They were like houseguests who never left,” my brother observed.  In her bestseller, “The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing,” Marie “KonMari” Kondo advises getting rid of things that don’t bring you joy.

Being surrounded by useless things, be they old magazines or appliances or clothes, can be draining. I am a big fan of regular (ok, semi-regular) sweeps to free up visual space, bringing an “ah” feeling to your eyes and brain. However, I want to caution you in your zeal to unclutter to consider keeping a few items that you may regret tossing later.  With all due respect to Kondo, it doesn’t have to bring you joy, but provide a crucial link with a person or memory you cherish.

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The Current Expected Credit Loss Model is Here… Now What?

HamiltonYou know the feeling you get when you are excitedly looking forward to something? It just can’t come soon enough. For instance, you enter Broadway’s mega-popular Hamilton -- the musical lottery -- every morning and anxiously await the email saying that you won. Even if the chances are only 909 to 1. 

The financial institution community has been anticipating the release of the Financial Accounting Standards Board’s credit losses standard. We have been following the process since the beginning. We reviewed drafts and submitted comments along the way. We participated in focus groups and met with the FASB to discuss the community banks’ concerns. The final standard is here. Now what?

Last month, the FASB issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326). The release of this new standard marks the end of accounting for credit losses using an incurred model. Institutions should not only consider all factors that have been incurred as of the reporting date, but also should estimate losses over the life of the loan. If an institution cannot estimate credit losses to the end of the loan’s life, taking into consideration any anticipated prepayments, it must estimate as far as it can and then revert back to the mean for the remaining years. This process sounds simple enough to implement, right?

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Summer Reading Recommendations

Summer reading 2Part II

Looking for things to read on your summer vacation? Here is the second installment of the AICPA summer reading recommendations. Missed Part I? You can find it here.

Tammy Atkins, Manager, Brand Management recommends:

  • All the Light We Cannot See by Anthony Doerr (2014)

This Pulitzer Prize-winning book is set during WWII. A blind French girl and young orphaned German boy offer the experience of war through children/young adults’ eyes. The young girl flees Paris with her father. The boy is enrolled in an academy for Hitler youth. The story gradually connects the two so that eventually their paths cross.

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Introducing a New Era in XBRL Data

Financial statementsWe could soon start to see a shift in how investors and other financial statement users access and analyze public company financial statement data. With the use of a technology called inline XBRL (iXBRL), data consumers will have access to view XBRL metadata while reading financial statements within their browsers.

In June, the Securities and Exchange Commission (SEC) issued an order to permit operating companies to use iXBRL in their periodic and current reports through March 2020. iXBRL enables XBRL information to be embedded into the HTML financial statement filing — as opposed to including XBRL data in a separate XBRL Exhibit. For filers that use iXBRL in their financial statements, this metadata will be viewable on the SEC’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system which now provides an iXBRL viewer. The SEC’s iXBRL viewer also provides enhanced search capabilities within the filings that use iXBRL.

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Do You Remember a Mentor’s Best Advice?

MentoringHave you ever approached a crossroads in your career and weren’t sure which path to take next? Or maybe you were struggling—with no luck—to gain more confidence and visibility in your job. If you were fortunate enough to have a mentor at these critical junctures, there’s a good chance you gained valuable insights into the best solutions and smartest next steps. In fact, 75% of executives in a poll by the Association for Talent Development said that a mentor had been critical in helping them ascend to their current position.

Mentoring includes imparting wisdom that the mentor has gained through a lifetime of business and personal experience. We reached out to members on LinkedIn and asked them to share some of the best advice they’d received from mentors throughout their careers. Here’s what they had to say:

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Modernizing Fax Filings with the IRS


Shutterstock_156974060Federal and state agencies, including the court systems, are modernizing by allowing the electronic filing of petitions and other court documents. For example, Alabama, Texas, Illinois and Missouri have e-filing systems for court petitions. In 2014, two federal courts (2nd and 9th Circuit Courts of Appeals) piloted an e-filing program for all courts in which the user is authorized to file electronically. The program is expected to become national in the next few years.

The IRS is also modernizing, although not as fast as many practitioners (or the AICPA) would like. Calls to the IRS and cases can be routed to any IRS employee or office all over the country. We are seeing more appeals conferences conducted by telephone with the various service centers instead of in person and expect Skype-type conferences to become more common. For many years, the IRS has electronically processed bank account and wage levies on delinquent accounts. Now, the IRS is also able to issue electronic summonses to eBay and PayPal.

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