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PROGRAM AND PROJECT MANAGEMENT
Are you falling behind on your projects or having trouble staying on budget? Is "scope creep" a common term used around your office? A skilled project manager can help you get your project back on track or ensure proper planning before it even begins.
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NEW MICHIGAN SALES TAX EXEMPTION FOR VEHICLE AND WATERCRAFT PURCHASES WITH TRADE-INS
By Susan Wagner
Michigan consumers will no longer be taxed on the full purchase price of new or used motor vehicles, recreational vehicles, or titled watercraft when a consumer provides a trade-in towards a purchase.
Starting December 15, 2013, Public Act 160 phases in an exemption from sales tax on the agreed upon value of a trade-in on the purchase of a new or used motor or recreational vehicle. The "agreed-upon value" of a trade-in must be stated on the invoice given to the purchaser. The exemption that is not subject to sales tax is currently limited to the lesser of the agreed-upon value or $2,000. Starting January 1, 2015, and each January 1 thereafter, the exemption is increased by an additional $500 per year. In the year in which the exemption exceeds $14,000 and each January 1 thereafter, the full amount of the agreed-upon value is exempt from sales tax.
As of November 15, 2013, the agreed-upon value of a titled watercraft will be exempted from sales tax when used as part payment of the purchase price of a new or used titled watercraft if the agreed-upon value is separately stated on the invoice.
If you have additional questions about the exemption, please contact your professional at UHY LLP in Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040 or visit us on the web at www.uhy-us.com.
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NEW REVENUE RECOGNITION RULES ARRIVING SOON
By Ryan Fletcher, CPA
The Financial Accounting Standards Board and the International Accounting Standards Board are developing a converged standard regarding revenue recognition that is expected to have an effect on all entities that adhere to US GAAP or IFRS. The standard is expected to be released in the first quarter of 2014.
The new standard can have a significant impact on the way that companies recognize and record revenue. The following are some of the important changes and hurdles that companies will face under the new standard:
New criteria for contract determination
Under the new standard, contracts and agreements must contain commercial substance (cash flows between the companies should be expected as a result of the arrangement), a commitment to perform obligations from both parties, and the identification of rights and responsibilities (including payment terms).
Updated disclosures
Disclosures regarding revenue recognition will need to include explanations for changes in balances, information about performance obligations, and identification of judgments made in the application of revenue recognition. Companies will also need to disclose the determination of the transaction price and the allocation to various performance obligations.
Disaggregation of performance obligations
Companies will be required to identify various components of a contract, specifically long-term contracts, and apply separate patterns of revenue recognition for those components, if considered necessary. For example, a software company would need to consider recognizing revenue on the software licensing component of a contract separately from the software upgrades included in the contract.
To learn more about these and other recent developments, please contact your professional at UHY LLP in Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040 or visit us on the web at www.uhy-us.com.
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SEC PLANS TO REFORM PUBLIC COMPANY DISCLOSURES
By Diane Burek, CPA
On December 20, 2013, the Securities and Exchange Commission ("SEC") issued a staff report to Congress regarding its disclosure rules for US public companies (Regulation S-K), which was mandated by Congress in the Jumpstart Our Business Startups ("JOBS") Act of 2012 and provides a framework for disclosure reform.
The SEC will coordinate with the Financial Accounting Standards Board to identify ways to improve the effectiveness of financial statement disclosures and minimize duplication with other requirements.
The SEC's next step is to develop specific recommendations for updating the rules. They will seek input from companies and investors to help them develop these recommendations, which will focus on improving disclosures in an effort to facilitate clearer and more effective communication to investors.
For more information or questions on this topic, please contact your professional at UHY LLP in Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040 or visit us on the web at www.uhy-us.com.
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GOODWILL IMPAIRMENT TESTING UPDATE - PRIVATE COMPANY IMPACT OF ENDORSEMENT
By Nicholas Junttila
The Financial Accounting Standards Board (FASB) recently endorsed a GAAP exception for private companies and their treatment of goodwill, marking a milestone in the work to provide simpler, less costly rules for private companies while producing financial statements that reflect economic reality.
The exception will exempt (with the exception of a triggering event) private companies from having to perform impairment tests for goodwill subsequent to a business combination. The exception gives private companies the option to amortize goodwill over ten years or less than ten years if the company can demonstrate that another useful life is more appropriate. Under the exception, a private company will be able to make an accounting policy decision to perform its impairment testing at the entity level or the operating level.
Prior to this exception by the FASB, a private company would test goodwill for impairment only when a triggering event occurs that may reduce the fair value of an entity or reporting unit (if elected) below its carrying amount. The exception would also eliminate Step 2 of the impairment test.
It is expected that the final standard, once issued, will be applied prospectively for goodwill existing as of the beginning of the period of adoption, and for goodwill generated from business combinations occurring in the first annual period beginning after December 15, 2014, and interim and annual periods thereafter. Goodwill that exists at the beginning of the period of adoption can be amortized prospectively over ten years or less than ten years if another useful life is more appropriate. Early adoption is permitted.
It should be noted that larger private companies may face a difficult decision. If they have any desire to go public, they may decline to use the exception because it would be challenging to go back and reconfigure their historical accounting at a later date.
For the latest updates, please contact your professional at UHY LLP in Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040 or visit us on the web at www.uhy-us.com.
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EVENTS CALENDAR
2/20 Seventh Annual D.M.G.C. Texas Hold Em' Tournament
Thursday, February 20, 2014
Registration at 6:00 PM. Game starts promptly at 7:00 PM.
Star Lanes at Emagine Royal Oak
200 North Main Street
Royal Oak, MI 48067
$100 buy-in and $50 re-buy. VIP prizes for finalists. Chips have no cash value. Must be 18 to play and 21 to consume alcohol.
Contact Shannon Gnesda at sgnesda@uhy-us.com or 586 843 2637 to save your spot! Cash, check or credit card contributions accepted in advance or at the door. Sponsorship opportunities available.
UHY Cares in cooperation with the D.M.G.C. and the McCarty family hope to see you there!
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SPECIAL ANNOUNCEMENTS
Jerry Grady Elected to EMU Advisory Board and Recognized as Alumnus of the Year
Gerald ("Jerry") Grady, partner at UHY LLP, was elected to the Eastern Michigan University Accounting and Finance Advisory Board on November 8, 2013. He was also chosen to chair this group and will be working with the department head and Dean of the School of Business.
On November 15, Grady humbly accepted the Eastern Michigan University Alumnus of the Year Award. The award was presented by the Accounting Department Chair, Zafar Khan. Upon Grady's acceptance, he provided students and faculty with a dynamic presentation focused on networking, the importance of 'dressing for success' and giving back to the community. He also took the time to discuss how many students came through Michigan's fall recruitment process this year and how many were hired - a few of which were in attendance that evening. Eastern Michigan University spoke very highly about Grady and UHY LLP's recruitment efforts.
Congratulations, Jerry!
Experienced Recruiting Update
UHY Michigan is actively looking for experienced candidates to fill key positions in our Farmington Hills and Sterling Heights Offices. Please review the openings below and if you know someone who may be interested in any of these roles please reach out to Amanda Sheets by email asheets@uhy-us.com or phone 586 843 2560. Job descriptions can be found on our careers page.
Sterling Heights
Seasonal Tax Consultant (five years public accounting experience)
Senior Tax Accountant
Tax Manager
Senior Audit Accountant
Corporate Finance Analyst and Associate
Sterling Heights or Farmington Hills
Forensic Accountant
Director of Litigation
Farmington Hills
Senior Tax Accountant
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Published by UHY LLP News.
Copyright � 2013 UHY LLP. All rights reserved.
Our firm provides the information in this newsletter as tax information and general business or economic information or analysis for educational purposes, and none of the information contained herein is intended to serve as a solicitation of any service or product. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of "UHY Advisors." UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. and UHY LLP are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. "UHY" is the brand name for the UHY international network. Any services described herein are provided by UHY Advisors and/or UHY LLP (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.
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