Wedding season is just around the corner and one thing none of these happy couples have probably thought about is the marriage penalty. It's understandable, no one proposes to their beloved by saying, "Will you marry me, thus forgoing a lower income tax bracket and itemized deductions?" It would sorta kill the moment.
Anyway, for those of you who regularly pump out 1040s, you'll enjoy our pal Tony Nitti's take on the latest stick in the eye for MFJ taxpayers:
In AOD 2016-02, the IRS acquiesced in the Ninth Circuit’s decision in Sophy v. Commissioner, in which the appeals court overturned a Tax Court decision and allowed a same-sex, unmarried, co-habiting couple to each deduct the mortgage interest on $1.1 million of acquisition and home equity debt. In reaching it’s conclusion, the Ninth Circuit determined that the mortgage interest limitation is meant to apply on a per-taxpayer, rather than a per-residence, basis. The AOD issued by the IRS confirms that the Service will follow this treatment.
Much of the impact of the Ninth Circuit decision is moot now that U.S. v. Windsor and Obergefell v. Hodges have guaranteed that all people in love can willingly be penalized for federal tax purposes.
The Accountant trailer
Well, this is unexpected:
The second trailer released for “The Accountant,” which stars the Oscar winner as a math genius CPA who moonlights as a book-cooker for a criminal clientele, was a hit on Twitter, according to data analytics firm ListenFirst Media.
Although we've already obsessed over the first trailer, it's worth pointing out that the second one has an incredible exchange about pocket protectors. Seeing how Twitter gets worked up pretty easily, that probably explains the boost. See you in theaters on October 14th.
Yesterday afternoon, I stumbled across this press release from Take-Two Interactive Software that explains the company's new approach to reporting its quarterly earnings in order "to comply with the SEC’s updated Compliance and Disclosure Interpretations" (all emphasis is original):
The Company will discontinue reporting Non-GAAP net revenue. Take-Two had previously reported Non-GAAP net revenue, which was adjusted for the net effect from deferral in net revenue. Going forward, the Company will only report GAAP net revenue and will separately disclose the change in deferred net revenue, which represents revenue recognized during the current period that was deferred in prior periods, net of revenue that is being deferred into future periods. For those who choose to do so, the change in deferred net revenue can be added to GAAP net revenue to calculate the financial measure that Take-Two formerly reported as Non-GAAP net revenue.
Maybe it's just me, but I find it amusing that a company is going out of its way to explain how anyone can re-create the non-GAAP metric that the company it's no longer using. I also think it's funny that farther down in the press release, the company discusses its "new operational metric":
In addition, starting with its results for fiscal first quarter 2017, the Company will report a new operational metric: bookings – which represents the total amount billed by the Company from sales of physical product sold-in to retail and available to consumers, net of allowances, plus products digitally-delivered to consumers during the period. In addition, Take-Two will separately report digitally-delivered bookings (including recurrent consumer spending) and catalog bookings.
Take-Two is providing these metrics because they are used by its management and Board of Directors to evaluate the performance of the Company’s business.
I'm no analyst, so I can't say whether these metrics are useful, and I don't stay on top of the latest investing parlance perhaps like I should, so this doesn't exactly clear things up for me, the casual observer. Which gets me thinking — how long will it take the SEC to start considering a ban on all non-GAAP metrics in earnings releases? Would it ever get to that point? Is that even possible? If so, would there be a mutiny?
However unlikely that is, the SEC is never going to convince companies, analysts or investors that GAAP is the gold standard of reporting and therefore, the best way to communicate financial performance. Sure, if you're Apple or Exxon you just report GAAP because no company can really touch you in terms of value, but most corporate managers are going to focus on the metrics it finds most useful and, usually, that isn't GAAP. Sometimes those metrics will be used to tell an embellished version of reality and other times they will be legitimately useful.
It seems that financial reporting is destined to become more and more tedious. Hopefully no one minds.
Previously, on Going Concern…
Crowe Horwath compensation and EY gets excited about its interns. Plus, in Open Items, someone is thinking about jumping from one mid-tier to another.
In other news:
- Steve Major interviewed me on his podcast, Pricing Power.
- Response to the WSJ's cargo shorts story has been, um, mixed.
- IASB pressed to fix 'wishy-washy' accounting rules
- Pot meet kettle: tax policy edition.
- Photographer sues Getty Images for $1 billion after she's billed for her own photo
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