Is Facebook Worth $100 Billion? [WSJ]
The Palo Alto, Calif.-based social network was valued at $15 billion in October 2007 when Microsoft Corp. invested in the company. By this January, Facebook commanded a $50 billion price tag when Goldman Sachs Group Inc. led a $1.5 billion funding round in the company. Today, transactions of Facebook stock on private marketplaces value it at about $84 billion. Some people believe that if Facebook goes public next year, it will trade at a $100 billion valuation, more than the market capitalizations of Hewlett-Packard Co. (currently at $74 billion) and Amazon.com Inc. (at $9g>US board changes swaps accounting for local govts [Reuters]
The board that sets accounting standards for state and local governments on Wednesday changed some financial reporting requirements for swaps and other hedging instruments the governments use. The Governmental Accounting Standards Board said that “deferred outflows” and “deferred inflows” of resources should be reported separately from assets and liabilities on financial statements.

Raters Put U.S. on Notice [WSJ]
Moody’s Investors Service said it was reviewing the government’s top Aaa bond rating for a possible downgrade, citing the “rising possibility” that the government’s $14.29 trillion borrowing limit won’t be raised soon enough to prevent the U.S. from running out of money to pay its bills. In addition, ratings agency Standard & Poor’s privately has told lawmakers and top business groups it might cut the U.S. credit rating if the government fails to make any of its expected payments—including Social Security checks—even if it makes all its debt payments, people familiar with the matter said.

Fan Who Returned Ball Is Reaping Rewards [WSJ]
On Wednesday, the 23-year-old from Highland Mills, N.Y., was guaranteed at least a $50,000 donation, given a 2009 World Series ring, and got an offer to have his taxes covered should the IRS not consider the items Lopez received Saturday gifts. In case there are still some contrarians who believe Lopez didn’t make the right decision, Topps announced Lopez will also have his own baseball card. “It’s an incredible feeling,” Lopez said yesterday at Modell’s Sporting Goods in Times Square, his newfound public relations team not far from his side. “Never ever would I have expected this, so it’s a cool thing.”

ConocoPhillips to Split Into Two Businesses [DealBook]
ConocoPhillips said on Thursday that it would break itself into two companies, spinning off its refining business to shareholders by the first half of next year. ConocoPhillips would hold onto its higher-margin exploration operations, and would seek acquisitions to expand that business.

Small Firms Defend LIFO [In Charge/WSJ]
Known as last-in, first-out – or LIFO – the strategy is used by businesses of all sizes to reduce taxable income by deducting the most recent cost of goods from sales. Since newer goods added to inventories tend to be more costly than older ones, the result gives the appearance of lower earnings, especially during periods of high inflation. In practice, most businesses prefer to sell older inventory items first, before they lose their value or become obsolete. Rolling back the strategy, which has been used for decades, would raise more than $60 billion in tax revenue over 10 years by increasing the tax liability of manufacturers, wholesalers and retailers nationwide, according to the administration. It has proposed repealing LIFO from the tax code since 2009.

White House threatens veto for bill defunding Wall Street reform [The Hill]
The Office of Management and Budget (OMB) issued a statement Wednesday saying senior advisers would recommend the president veto an appropriations package for financial services and general government if it made it to the president’s desk. The legislation was approved down a party-line vote by the House Appropriations Committee. Among a litany of problems it identified with the package, OMB warned that the $19.9 billion package does not provide sufficient funding to the Internal Revenue Service (IRS), Securities and Exchange Commission (SEC), or the new Consumer Financial Protection Bureau (CFPB).

EU’s Barnier says won’t budge on accounting rule [Reuters]
The European Union won’t give the green light yet to a new accounting rule that could ease fallout from the euro zone’s sovereign debt crisis on banks, a top EU official said on Wednesday. “I do not believe this will be the first solution to the problems we face in Europe at the moment,” EU Internal Market Commissioner Michel Barnier told a webcast meeting in New York. The International Accounting Standards Board (IASB), under pressure from policymakers at the height of the financial crisis, has eased its “fair value” or mark-to-market rule that was known as IAS 39.

Cat Owners Hiss at Licensing Proposal [NBC SD]
“So now you have Animal Control being your tax collector,” says Sandee Gilbert, the owner of a 1-year-old Cornish Rex male named Nike. “And as a tax collector, you’re going to accrue a tremendous amount of cost trying to find the owner of that cat.”

Debt Talk Mired, Leader for G.O.P. Proposes Option [NYT]
From the White House and Congress to financial centers, pessimism spread on Tuesday about the prospects of a debt-limit deal between President Obama and Republicans, prompting the Senate Republican leader to propose a “last-choice option” that piqued the administration’s interest but angered conservatives in his own party. The leader, Senator Mitch McConnell of Kentucky, said a bipartisan budget-cutting deal is probably out of reach, making it unlikely that Republicans would approve an increase in the government’s debt limit by Aug. 2. To prevent default, he proposed that Congress in effect empowe the government’s borrowing limit without its prior approval of offsetting cuts in spending.

News Corp pays 20% tax in US [FT]
News Corp’s political influence, which has ruptured dramatically in the UK in the past week, has not come as a result of its contributions to government coffers. Its latest 10-K statement showed that although the corporate tax rate in the US is 35 per cent, News Corp’s effective tax rate last year was 20 per cent. The company earned $2.5bn in profits and still managed to receive a tax benefit.

Senate Bill Seeks to Raise Revenue by Closing Tax Havens [NYT]
A bill introduced by Carl Levin of Michigan and Kent Conrad of North Dakota would tighten rules that allow hedge funds and corporations in the United States to skirt federal taxes by opening shell companies overseas. The measure would also change the I.R.S. regulations that allow traders of credit-default swaps to avoid paying federal taxes on many transactions that begin in the United States. And to help tax collectors track down hidden assets overseas, the proposal would empower the Treasury Department to ban any foreign bank that refused to cooperate with the I.R.S. By closing the loopholes, the plan could bring the Treasury as much as $100 billion a year, according to various estimates cited by Mr. Levin.

CFOs Having Second Thoughts on Capital Investments [CFOJ]
More than 40% of the 78 CFOs polled in the last two weeks of May said they would rather keep their cash and stay liquid than invest it. Respondents projected that capital spending would increase by 10.7% over the next year, less than the 11.8% forecast they gave in the previous quarter.

China frauds: In (partial) defense of the auditors [Bronte Capital]
I’m guessing audit firms will gladly take a partial defense from someone who isn’t a law firm that represents them.

PwC Will Answer For Centro But Judge Slams Directors First [Forbes]
PwC’s latest problems are down under.

FASB Tackling Private Company Accounting [CFOJ]
The Financial Accounting Standards Board took a step forward in developing modified GAAP for private companies on Monday, a move a main advocate of the standards found encouraging. The accounting standard setter announced that it had completed an initial assessment of the differences in the way private company financial statements are used by lenders, investors and others. In its announcement, FASB said that it would continue working towards creating a framework for private-company GAAP, and is seeking additional input on the issue.

Watchdog Proposes Dodd-Frank Standards for Broker-Dealer Audits [Bloomberg]
Accounting firms would have to consider how much risk their clients take when auditing brokerage firms under rules proposed by the industry’s new watchdog. The proposal from the Public Company Accounting Oversight Board comes a month after the nonprofit corporation established an inspection program for auditors of broker-dealers under terms of the 2010 Dodd-Frank financial reform act. “It would require auditors to use judgment to identify and focus on matters that are most important to the customer- protection objectives,” said PCAOB Chairman James R. Doty, in a statement.

Rush to Defend Tax Rule on Inventory and Profits [NYT]
One of the biggest revenue-raisers proposed by President Obama in negotiations with Congress is what he describes as an arcane change in the tax treatment of business inventories — things like steel, groceries and oil. But however complex the details, the effect of the change would be substantial, and in pushing for it Mr. Obama has kicked a hornet’s nest. Lobbyists from companies of all sizes are swarming around Congress to kill the proposal, which would prohibit the use of an accounting technique known as last in, first out, or LIFO. The technique is used to determine the cost of goods sold, and therefore the income earned, by a company.