Valeant Likely to Restate Results in Wake of Internal Review [WSJ]
After several months of hubbub around Valeant, there appears to be something to it all:
Valeant said late Monday night that it believes about $58 million of revenue recognized in late 2014 should have instead been booked the following year. The misstatements are related to shipments of some Valeant products to a distributor, Philidor Rx Services LLC, which has been at the center of a turbulent few months for Valeant.
This gives the company a sad:
The Company expects to delay filing its 2015 10-K pending completion of the review of related accounting matters by the Ad Hoc Committee, with the assistance of its independent advisors, and the Company's ongoing assessment of the impact on financial reporting and internal controls.
"This determination and the need to delay our 10-K filing are very disappointing but necessary," stated Howard Schiller, interim chief executive officer. "We remain committed to improving reporting procedures, internal controls and transparency for our investors."
It's not quite Enron, but I'm sure lots of people are feeling vindicated.
SEC Nods to Multinationals [WSJ]
Current GAAP requires non-GAAP reporting to be reconciled to GAAP. That's about as fun as it sounds, so the SEC might loosen the rules a bit for companies that use IFRS.
James Schnurr, the SEC’s chief accountant, said his office is working on aproposal to drop the reconciliation requirement, letting companies supplement their U.S. financial reports with ones filed with foreign regulators using international standards.
Mr. Schnurr didn’t provide a timetable for the change, which appears to be a refinement of the SEC earlier efforts to allow companies to report the additional information voluntarily.
“We believe the SEC’s proposal is a useful next step,” said Paul Andonian, Ford Motor Co.’s director of global accounting. “Yet we are concerned that providing both [international accounting standards] and U.S. GAAP financial data could be complicated.”
If there's one thing that financial reporting simplification always seems to accomplish, it's to further complicate financial reporting.
Fewer IRS Audits
For reasons I don't fully understand, the threat of IRS audit seems to scare lots of people. I'm sure the enjoyment one derives from an audit is lower than, say, a day at the beach, but I can't imagine it being any worse than having extensive dental work done. I say this as someone who has never been audited so, yes, that makes me somewhat ignorant of the process. However, I don't have anything to hide and therefore, wouldn't be all that concerned if I were selected. If IRS agents came to my house, I'd offer them a beverage and show them my tax returns and probably introduce them to my cats. They'd see that everything's in order, thank me for the refreshments and be on their way.
That's how I imagine it, anyway. The chances of that scenario happening are better if you make $1 million or more, much better than they used to be, in fact:
The Internal Revenue Service continued to ramp up its focus on high earners in fiscal 2015, according to data released by the agency Monday.
The IRS audited nearly 10% of returns with income of more than $1 million, compared with 7.5% the year before, in the fiscal year ended Sept. 30.
As a whole, audits are down. Only 1% of the 147 million returns filed in 2015 were audited, "the lowest rate in a decade." And of those, 75% are conducted by mail rather than a "field audit" when an IRS agent comes for a visit. So unless I start hustling aggressively, my imaginary audit won't even involve quenching the the thirst of IRS agents.
Previously, on Going Concern…
I wrote about the noise around Donald Trump releasing his tax returns.
In other news:
- KPMG launches accelerator for start-ups to conquer America
- Two Ranking Democrats to Offer Bill Aimed at Inversions
- Bernie Sanders adjectives.
- Internet toothbrush.