Accounting News Roundup: Coburn Offers Up Deficit Reduction Plan; RIP Borders; NYSSCPAs Suggests RTRP Exam Include Sample 1040 | 07.19.11

Bank of America Has Record Loss on Bad Home Loans [Bloomberg]
Bank of America Corp. (BAC) posted the biggest quarterly loss in the lender’s history after Chief Executive Officer Brian T. Moynihan booked more costs tied to defective mortgages. The shares rose 1 percent in early trading as the outlook for credit losses improved. The second-quarter loss of $8.83 billion, or 90 cents a share, compared with profit of $3.12 billion, or 27 cents, a year earlier, the Charlotte, North Carolina-based lender said today in a statement. Provisions for future credit losses dropped 60 percent, the bank said, and profit excluding one-s was 33 cents a share, beating the 29-cent average estimate of 21 analysts surveyed by Bloomberg.

Coburn deficit plan offers $9 trillion in savings [WaPo]
Sen. Tom Coburn (R-Okla.) on Monday released a plan that he says would achieve $9 trillion in deficit savings over the next decade through a combination of far-reaching spending cuts, entitlement reform and increased tax revenue. “This plan offers the American people 9 trillion reasons to stop making excuses and start solving the problems in Washington,” Coburn said at a Monday afternoon news conference announcing the 600-plus-page plan. “I have no doubt that both parties will criticize this plan, and I welcome that debate. But it’s not a legitimate criticism until you have a plan of your own.”

News Corp. Said to Consider Naming Chase Carey as CEO, Succeeding Murdoch [Bloomberg]
News Corp. executives who watched Murdoch, 80, rehearse for his appearance had concerns about how he handled questions, according to three people, who weren’t authorized to speak publicly. Murdoch and his son James are scheduled to discuss the company’s role in the alleged phone hacking of murder victims, members of the royal family and others by the News of the World, which was closed on July 10.

Accounting `Red Flags’ Drive Bond Spreads to Record Levels: China Credit [Bloomberg]
Borrowing costs have risen to record levels for Chinese companies marked with “red flags” by ratings firms for unclear financial reporting and high levels of private ownership. The extra yield investors demand to own the bonds of Nine Dragons Paper Holdings Ltd. (2689), LDK Solar Co. and Road King Infrastructure Ltd. (1098) instead of similar-maturity government debt widened to all-time highs after they were named by Fitch Ratings or Moody’s Investors Service for issues such as having changeable profit margins or long-serving independent directors.

Borders Forced to Liquidate, Close All Stores [WSJ]
Borders, which employs about 10,700 people, scrapped a bankruptcy-court auction scheduled for Tuesday amid the dearth of bids. It said it would ask a judge Thursday to approve a sale to liquidators led by Hilco Merchant Resources and Gordon Brothers Group. The company said liquidation of its remaining 399 stores could start as soon as Friday, and it is expected to go out of business for good by the end of September.

Study: Tax Credit Had ‘Fleeting’ Effect on Housing Markets [WSJ]
Critics of last year’s $8,000 tax credits for home purchases routinely argued that the credits were unlikely to do more than offer sellers the chance to boost their sale price by the amount of the tax credit. Those critics won’t be surprised, then, by a new paper that finds—you guessed it—that average listing prices rose by around $8,000 in the month after the signing of the first major tax credit, and that they fell by slightly less than $9,000 two months after the tax credits expired.

Is Green Mountain Coffee Roasters serving double talk to the press? [WCF]
Warning: the bullshit out of GMCR is extremely hot!

Huron Consulting Group Appoints Chief Financial Officer [Huron Consulting]
C. Mark Hussey has quite the alphabet soup on his résumé – CPA, CMA, CFA.

New York CPAs Give IRS a To-Do List for Tax Prep Exam [AT]
“A practical section involving the preparation of a sample return is essential,” wrote Jonathan Horn and Vincent J. Cosenza, the chair and vice chair, respectively, of the NYSSCPA Taxation of Individuals Committee. he exam taker should complete not only a sample Form 1040, they suggested. The exam should also cover, at a minimum, a variety of tax law areas required to properly complete a 1040. The three-to-four hour test should include a combination of multiple-choice questions, short-answer questions, and at least one essay question that that would “test the applicants’ ability to communicate tax concepts to their clients.”

Bank of America Has Record Loss on Bad Home Loans [Bloomberg]
Bank of America Corp. (BAC) posted the biggest quarterly loss in the lender’s history after Chief Executive Officer Brian T. Moynihan booked more costs tied to defective mortgages. The shares rose 1 percent in early trading as the outlook for credit losses improved. The second-quarter loss of $8.83 billion, or 90 cents a share, compared with profit of $3.12 billion, or 27 cents, a year earlier, the Charlotte, North Carolina-based lender said today in a statement. Provisions for future credit losses dropped 60 percent, the bank said, and profit excluding one-time gains and losses was 33 cents a share, beating the 29-cent average estimate of 21 analysts surveyed by Bloomberg.

Coburn deficit plan offers $9 trillion in savings [WaPo]
Sen. Tom Coburn (R-Okla.) on Monday released a plan that he says would achieve $9 trillion in deficit savings over the next decade through a combination of far-reaching spending cuts, entitlement reform and increased tax revenue. “This plan offers the American people 9 trillion reasons to stop making excuses and start solving the problems in Washington,” Coburn said at a Monday afternoon news conference announcing the 600-plus-page plan. “I have no doubt that both parties will criticize this plan, and I welcome that debate. But it’s not a legitimate criticism until you have a plan of your own.”

News Corp. Said to Consider Naming Chase Carey as CEO, Succeeding Murdoch [Bloomberg]
News Corp. executives who watched Murdoch, 80, rehearse for his appearance had concerns about how he handled questions, according to three people, who weren’t authorized to speak publicly. Murdoch and his son James are scheduled to discuss the company’s role in the alleged phone hacking of murder victims, members of the royal family and others by the News of the World, which was closed on July 10.

Accounting `Red Flags’ Drive Bond Spreads to Record Levels: China Credit [Bloomberg]
Borrowing costs have risen to record levels for Chinese companies marked with “red flags” by ratings firms for unclear financial reporting and high levels of private ownership. The extra yield investors demand to own the bonds of Nine Dragons Paper Holdings Ltd. (2689), LDK Solar Co. and Road King Infrastructure Ltd. (1098) instead of similar-maturity government debt widened to all-time highs after they were named by Fitch Ratings or Moody’s Investors Service for issues such as having changeable profit margins or long-serving independent directors.

Borders Forced to Liquidate, Close All Stores [WSJ]
Borders, which employs about 10,700 people, scrapped a bankruptcy-court auction scheduled for Tuesday amid the dearth of bids. It said it would ask a judge Thursday to approve a sale to liquidators led by Hilco Merchant Resources and Gordon Brothers Group. The company said liquidation of its remaining 399 stores could start as soon as Friday, and it is expected to go out of business for good by the end of September.

Study: Tax Credit Had ‘Fleeting’ Effect on Housing Markets [WSJ]
Critics of last year’s $8,000 tax credits for home purchases routinely argued that the credits were unlikely to do more than offer sellers the chance to boost their sale price by the amount of the tax credit. Those critics won’t be surprised, then, by a new paper that finds—you guessed it—that average listing prices rose by around $8,000 in the month after the signing of the first major tax credit, and that they fell by slightly less than $9,000 two months after the tax credits expired.

Is Green Mountain Coffee Roasters serving double talk to the press? [WCF]
Warning: the bullshit out of GMCR is extremely hot!

Huron Consulting Group Appoints Chief Financial Officer [Huron Consulting]
C. Mark Hussey has quite the alphabet soup on his résumé – CPA, CMA, CFA.

New York CPAs Give IRS a To-Do List for Tax Prep Exam [AT]
“A practical section involving the preparation of a sample return is essential,” wrote Jonathan Horn and Vincent J. Cosenza, the chair and vice chair, respectively, of the NYSSCPA Taxation of Individuals Committee. he exam taker should complete not only a sample Form 1040, they suggested. The exam should also cover, at a minimum, a variety of tax law areas required to properly complete a 1040. The three-to-four hour test should include a combination of multiple-choice questions, short-answer questions, and at least one essay question that that would “test the applicants’ ability to communicate tax concepts to their clients.”

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