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November 28, 2022

Accounting News Roundup: Later, 112th; Judge Gives Ex-Satyam Audit Committee Members a Break; What About Deferral of Foreign Income? Anyone? | 01.03.13

Fresh Budget Fights Brewing [WSJ]
The completion of a tax deal between the White House and Congress sent stocks soaring Wednesday, but the sense of relief belied the fact that more tax-and-spending brinkmanship is expected as soon as February. […] There was muted satisfaction that Congress had sent to President Barack Obama legislation to avoid sudden tax increases and spending cuts that threatened to provoke a recession. The president signed the legislation into law on Wednesday. Moody's Investors Service, one of the firms that rate government debt, said Wednesday that the agreement didn't do enough to reduce the deficit. If Congress doesn't do more in the coming months, Moody's warned, the company could follow Standard & Poor's in downgrading U.S. debt. "Further measures that bring about a downward debt trajectory over the medium term are likely to be needed to support the AAA rating," Moody's said Wednesday.

Good Riddance to Rottenest Congress in History [Bloomberg]
What’s the record of the 112th Congress? Well, it almost shut down the government and almost breached the debt ceiling. It almost went over the fiscal cliff (which it had designed in the first place). It cut a trillion dollars of discretionary spending in the Budget Control Act and scheduled another trillion in spending cuts through an automatic sequester, which everyone agrees is terrible policy. It achieved nothing of note on housing, energy, stimulus, immigration, guns, tax reform, infrastructure, climate change or, really, anything. It’s hard to identify a single significant problem that existed prior to the 112th Congress that was in any way improved by its two years of rule.

Ex-directors of Satyam win ruling in U.S. class-action suit [Reuters]
A U.S. federal judge dismissed claims against seven former directors of Satyam Computer Services Ltd (SATY.NS) in shareholder lawsuits stemming from the massive fraud at the heart of India's largest corporate scandal. U.S. District Judge Barbara Jones in New York ruled on Wednesday the lawsuits failed to allege that the ex-directors recklessly failed to discover the fraud, which came to be known as "India's Enron." The lawsuits center on the revelation by Satyam's founder and former chairman, Ramalinga Raju, that what had been India's fourth-largest outsourcing firm had for several years inflated its revenue, income and cash balances by more than $1 billion. In her decision Wednesday, Jones said the allegations primarily focused on the actions of a small group of insiders, reinforcing an inference the audit committee's members "were themselves victims of the fraud."

Putin gives tax exile Depardieu Russian citizenship [Reuters]
Russian President Vladimir Putin has granted citizenship to Gerard Depardieu, the French movie star who is quitting his homeland to avoid a tax hike on the rich, the Kremlin said on Thursday. The "Cyrano de Bergerac" actor bought a house across the border in Belgium last year to avoid a new tax rate for millionaires in France planned by Socialist President Francois Hollande but said he could also seek tax exile elsewhere. Kremlin spokesman Dmitry Peskov said Depardieu had applied for citizenship after Putin told reporters last month that he would be welcome in Russia. "The citizenship could not have been granted to him without (such an) appeal," Peskov said. Putin told a news conference last month: "If Gerard really wants to have either a residency permit in Russia or a Russian passport, we will assume that this matter is settled and settled positively."

Al Jazeera Seeks a U.S. Voice Where Gore Failed [Media Decoder/NYT]

Al Jazeera on Wednesday announced a deal to take over Current TV, the low-rated cable channel that was founded by Al Gore, a former vice president, and his business partners seven years ago. Al Jazeera plans to shut Current and start an English-language channel, which will be available in more than 40 million homes, with newscasts emanating from both New York and Doha, Qatar. […] Al Jazeera did not disclose the purchase price, but people with direct knowledge of the deal pegged it at around $500 million, indicating a $100 million payout for Mr. Gore, who owned 20 percent of Current. Mr. Gore and his partners were eager to complete the deal by Dec. 31, lest it be subject to higher tax rates that took effect on Jan. 1, according to several people who insisted on anonymity because they were not authorized to speak publicly. But the deal was not signed until Wednesday.
 
Spam maker buys Skippy peanut butter [CNN]
Hormel Foods, the maker of Spam luncheon meat, is paying $700 million to buy the Skippy peanut butter brand from consumer products maker Unilever, the companies announced Thursday. Hormel said Skippy has annual sales of $370 million, nearly $100 million of which comes from outside the United States. It said it is the leading brand of peanut butter in China and the No. 2 peanut butter brand overall, behind only Jif, which is owned by J.M. Smucker.
 
How Jim Henry attracts and develops top talent at PwC San Francisco [SBN]
If you're curious to know.
 
The Unspoken Tax Expenditure [Robert Goulder/TA]
That would be: deferral of foreign corporate income.
 
Starbucks to open 1st Vietnam cafe [AP]
Ho Chi Minh City will be your saving grace should you be caught in the area.
 
I-T finds Tirupur man with US bonds worth $5bn [TOI]

The investigation wing of the Income Tax (I-T) department in Coimbatore has seized US treasury bonds worth about Rs 27,500 crore from a 45-year- old man claiming to be a financial broker-cum-business consultant in Dharapuram in Tirupur district. I-T sleuths here said the bonds were seized in a raid on December 31 at the residence of T M Ramalingam on Dharapuram-Palani Road near Upputhurai, about 80 kms from Coimbatore, in Tirupur district. The bonds are worth $5 billion. […] "We have seized the bonds and are now trying to verify whether those are genuine. The raid was conducted on Wednesday on the basis of a tip-off from financial consultants. This appears to be the most baffling raid as the individual does not seem like a person who could raise such a huge amount. But we are verifying and tracking his financial transaction and business dealings to confirm these details," said a senior I-T official here in Coimbatore.

 

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