Shift-change inefficiency, for example, occurs 50% more with a traditional eight-hour shift, as there are three shift changes with eight-hour shifts, compared to two with twelve-hour shifts. Downtime, another major challenge, typically happens during start-ups, shut downs, and shift changes, resulting in lost volume and additional waste.

For the full Industry Week article, click here.

On Dec. 31, 2012, the FDIC's (Federal Deposit Insurance Corporation) unlimited guarantee on noninterest-bearing bank deposits will end. The guarantee allowed companies to maintain large cash balances in multiple institutions without fear of loss of assets due to bank failure. After the expiration of the guarantee, only the first $250,000 of each deposit will remain insured by the FDIC. Company treasurers are looking at several options to preserve their corporate assets once the shift occurs. Money-market funds are one potential option, but many treasurers are shying away from money funds with exposure to the euro-zone crisis, thereby limiting their choices. Money market funds are also worried that they might not be able to handle the corporate inflows of cash without compromising returns for their current investors.

 

Some treasurers of large corporations have stated that they feel comfortable leaving cash in the largest U.S. banks without the total coverage provided by the FDIC guarantee. However, this train of thought leaves smaller banks in a bind. Many bank managers of smaller banks are concerned about losing large amounts of deposits from corporate customers. FDIC Chairman Sheila Bair stated that the guarantee's abrupt end could create instability in the banking system. She suggested that instead of simply allowing the guarantee to dissolve, lawmakers should institute a phase-out. However, lawmakers have been quiet thus far about any extension of the unlimited guarantee.

 

For more information, please contact Scott Olinger, CPA, CPIM, at (800) 880-7800. 

The IRS announced that it is delaying the effective date of the temporary regulations it issued in December 2011 governing whether tangible property expenses could be deducted or had to be capitalized (T.D. 9564), which were to apply to tax years beginning on or after Jan. 1, 2012. In  Notice 2012-73, the IRS said that it will amend the temporary regulations to make them apply to tax years beginning on or after Jan. 1, 2014 instead of tax years beginning on or after Jan. 1, 2012.

Although the effective date has been delayed, taxpayers will be permitted to apply the temporary regulations for tax years beginning on or after Jan. 1, 2012, and before the applicability date of the final regulations. This makes the use of the temporary regulations optional until the final regulations are issued. The IRS expects to finalize the tangible property regulations in 2013, which will be applicable to tax years beginning on or after Jan. 1, 2014.

In addition, the IRS announced that, when the final regulations are published, the following rules will be revised to simplify them:

• The de minimis rule in Temp. Regs. Sec. 1.263(a)-2T(g).
• The rules for dispositions in Temp. Regs. Secs. 1.168(i)-1T and 1.168(i)-8T.
• The safe-harbor rule for routine maintenance in Temp. Regs. Sec.1.263(a)-3T(g).

The IRS did not specify how these rules would be simplified, but it did note that it would take into consideration comments requesting relief for small businesses.

For additional information, please contact John Rittichier, CPA, at (800) 880-7800.