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December 1, 2022

Accounting News Roundup: Barclays CEO Is Out; Microsoft’s Write-off; An Outdated Drilling Subsidy | 07.03.12

Barclays CEO Robert Diamond Resigns [WSJ]
The chief executive of Barclays, Robert Diamond, resigned Tuesday amid intense political and investor pressure from the British bank's involvement in rigging an important interest-rate benchmark—and another senior executive appeared close to following him out the door. The scandal is tearing through Barclays's top ranks. Two people close to the bank said Tuesday that Jerry del Missier, the chief operating officer, is likely to step down from his role. Monday, the bank said Chairman Marcus Agius would resign. Mr. Agius will remain chairman while Barclays searches for his replacement—and for a new chief executive, the bank said. Mr. Diamond will leave the bank immediately.

Microsoft Takes Write-Down in Failed Digital Ad Foray [DealBook/NYT]

Microsoft owned up on Monday to the collapse of its biggest push into digital advertising, announcing that it would take a $6.2 billion accounting charge in its online services division for a failed acquisition. The accounting charge, called a write-down of good will, was essentially a write-off of the value of aQuantive, a digital advertising company that Microsoft bought in 2007. It will effectively wipe out Microsoft’s fourth-quarter profit. The company said it took the write-down because “expectations for future growth and profitability are lower than previous estimates” for the online services unit. The charge will not affect the online services division’s operations or financial performance, Microsoft said. “It’s disappointing, but it is not a shock at this point,” said Brendan Barnicle, senior research analyst at Pacific Crest Securities. “The industry has evolved beyond where aQuantive was when Microsoft bought it.”

Ex-CFO of Philadelphia Archdiocese admits stealing $900,000 [Reuters]
The former chief financial officer of the embattled Roman Catholic Archdiocese of Philadelphia has pleaded guilty to stealing $906,000 from the church, the district attorney's office said on Monday. The archdiocese, facing a $17 million budget hole and still reeling from last month's conviction of a monsignor in a child sex abuse scandal, was the target of a forgery and theft scheme run by former financial officer Anita Guzzardi. The former CFO admitted on Friday that she stole the money from 2004 to 2011. Guzzardi, 43, was fired in July 2011.

 
Former NFL Player Johnnie Morton Jr. Sentenced for Lying to Grand Jury [AT]
Former NFL wide receiver Johnnie Morton Jr., who used to play for the Detroit Lions, the Kansas City Chiefs and the San Francisco 49ers, was sentenced Monday to two years’ probation for lying to a federal grand jury during an Internal Revenue Service criminal investigation. Morton, 40, of Redondo Beach, Calif., testified under oath before a federal grand jury in Santa Ana, Calif. on September 30, 2009.  The grand jury was inquiring into possible violations of federal money laundering laws by a business associate of Morton’s, Neang Chhorvann. Chhorvann, 32, of Bishop, Calif., pleaded guilty to one count of money laundering, including a purchase of a Lamborghini Murcielago on March 29, 2011.  Chhorvann was scheduled to be sentenced on August 8, 2011 but failed to appear.
 
Chesapeake’s 1% Tax Rate Shows Cost Of Drilling Subsidy [Bloomberg]
Chesapeake Energy Corp. (CHK) made $5.5 billion in pretax profits since its founding more than two decades ago. So far, the second-largest U.S. natural-gas producer has paid income taxes on almost none of it. Chesapeake paid $53 million over its 23-year history, or about 1 percent of the cumulative pretax profits during that period, data compiled by Bloomberg show. That’s less than half of Chief Executive Officer Aubrey McClendon’s compensation, for example, in 2008 alone. The company and other U.S. oil and gas producers can thank a century-old rule that allows them to postpone income taxes in recognition of the inherent risk of drilling wells that may turn out to be dry. The break may be outdated for companies such as Chesapeake, which, thanks to advances in technology, struck oil or gas in 99.6 percent of its wells last year. “To the extent the world is a different place than it was when the policy was first devised, that’s a powerful reason to revisit the need for this subsidy,” said Edward Kleinbard, a former chief of staff on the congressional Joint Committee on Taxation who now teaches at the University of Southern California in Los Angeles.

How Delaware Thrives as a Corporate Tax Haven [NYT]
Big corporations, small-time businesses, rogues, scoundrels and worse — all have turned up at Delaware addresses in hopes of minimizing taxes, skirting regulations, plying friendly courts or, when needed, covering their tracks. Federal authorities worry that, in addition to the legitimate businesses flocking here, drug traffickers, embezzlers and money launderers are increasingly heading to Delaware, too. It’s easy to set up shell companies here, no questions asked.

Man Experiences Intense Pain While Watching Pornographic Videos, Study Says [HP]
A 24-year-old man in India experiences severe, "exploding" headaches when he watches pornographic videos, according to a study published in the June issue of Archives of Sexual Behavior. The subject of the study, an unmarried software professional whose name has not been released, has experienced these headaches for the past two years. His migraines would gradually increase in severity as the man watched X-rated videos, with the pain reaching peak intensity at about 8-10 minutes. At this point, he would tear himself away from the videos due to the pain.

 

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