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Friday Footnotes: KPMG Belfast; PTIN Fees Lawsuit; Sleep Deprivation | 02.19.16

Posted on by Going Concern News Desk

Always read the footnotes, capital market servants. Drop us links and tips over the weekend by hitting the button at the top of the page or emailing us directly. Follow us on Twitter, Facebook and Pinterest and subscribe to our daily newsletter. Submit questions, career conundrums and statements to the Pope in Open Items.

KPMG overhauls Belfast office amid tax probe [FT]

Consensus on Need to Revise Tax Code, but Partisan Split on Specifics [NYT]

Google accounts show 11 billion euros moved via low tax 'Dutch sandwich' in 2014 [Reuters]

Lawsuit Against IRS Over PTIN Fees Gains Class-Action Status [AT]

How to Respond When Your Employee Asks for a Raise [HBR]

[T]hey are no more getting rid of performance reviews than a person who shifts from drinking whisky to wine is becoming teetotal. [The Economist]

FBI Raids Headquarters of United Development Funding [WSJ]

The organizational cost of insufficient sleep [McKinsey]

PCAOB Enforcement Orders: Mark Nelson; Clay Thomas; Michael Slapnik.

Justice Scalia Brought the Funny, Even to Tax Litigation [BNA]

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Is Your Firm Cutting Fringe Benefits?

Last week we touched on the shockingly sensitive subject of charging time while traveling. You see, apparently it was (at one time) a-okay in some KPMG offices (Southeast) while in others, the mere idea of charging time while traveling was utter nonsense.

So that got one reader to thinking – what the hell else is being cut out these days?

Please consider a post related to fringe benefits. I’m curious in knowing whether the larger firms are allowing their employees to keep points for dollars spent on company credit cards. But there are other points programs (i.e., frequent flyer miles) and fringe benefits (i.e., gym memberships, cell phones, etc.) that may be declining on top of all of the poor raises.


Big 4 firms have been quite generous with the fringe benefits (e.g. elderly parent care, subsidizing public transit passes, etc.) and they make a point to remind you of it from the day you interview with the firm to the day you leave. However, since we’re living in unprecedented times, nothing is unheard of.

If your firm has recently gotten stingy on fringe benefits, from the vastly important (401k match) to the less crucial (discounts at Brooks Brothers) discuss or shoot us the details.

People Need to Calm Down About the FASB’s New Fair Value Proposal

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

The accounting change for reporting the value of banks’ loans, which got the New York Times all hot and bothered yesterday morning, really amounts to a hill of beans, once you take a closer look at it.

In fact, the description in the article left me scratching my head on a couple of counts. How, for example, do banks write down the value of non-performing loans, as accounting rules require them to do, if they don’t mark them to market?


And what’s up with the tortuous explanation of how the Financial Accounting Standards Board decided to have banks mark to market the loans for purposes of the balance sheet but not for earnings? While I’m as big a fan as anyone of Jack T. Ciesielski, the accounting expert who publishes the investment newsletter, the Analyst’s Accounting Observer, his quote calling the decision a “smorgasboard” doesn’t really mean anything without some sort of context.

That context is pretty easy to provide, at least in the eyes of Charles Mulford, a Georgia Tech accounting professor and advisor to CFOZone.

As Mulford sees it, FASB simply is bringing information that’s already contained in the footnotes onto the balance sheet, specifically into the line item on that statement known as “other comprehensive income.” And this quite naturally has no impact on the earnings bank report on their income statements.

Currently, banks’ balance sheets carry loans at historical cost, less an estimate of the portion that is uncollectible, with fair value information in the notes, the accounting professor explains. The proposal would move the fair value information to the balance sheet by reconciling the cost of the loan with its fair value, he continues. But Mulford adds that there would be no change in the income statement, since that already includes any loan impairments. Instead, adjustments to fair value would be accounted for as a component of other comprehensive income, which is reported on the balance sheet.

“I view it more of a change in presentation than a change in accounting,” says Mulford.

In other words, investors who pay attention already understand this, so any complaints on the parts of banks should be seen as just an attempt to continue to fool those that don’t.