Going Concern

News

Audited Financial Statements for NFL Ventures, L.P. Are Now Available for Your Viewing Pleasure

Caleb Newquist
July 16, 2011

Today in leaked sports organization financial statements news, Deadspin’s latest scoop is the audited financial statements of NFL Ventures, L.P. and Subsidiaries. NFL Ventures consists of the following subsidiaries: NFL Enterprises, NFL Properties, NFL Productions and NFL International. These companies perform operations from broadcasting to advertising to the NFL Network to Super Bowl hospitality.

As you can imagine, professional football in the United States is a pretty lucrative business. Forget the mess that is the

Ugh. That’s an ugly one, huh? I managed to get pretty close on the math, however. If you multiply the total expenses by 1.09 and then subtract that total from the gross revenues of $1.7 billion, you get the $1.2 billion (within $15-20 million or so). Craggs writes that this “accounts for the drop in net income” although that doesn’t seem correct (I emailed him to see if he can clarify) but is correct in saying that this remittance is simply “money moving from one pocket to another.”

Other than that, the report, also audited by Deloitte, is fairly lengthy and seems fairly innocuous since the companies as a whole appear to be extremely healthy (e.g. robust working capital, growing operating profit, impressive cash flow). There was a cash distribution FYE ’10 of $136 million to the limited partners, however nothing else really stands out.

Of course if you’re a rabid football fan, this is all quite infuriating because it stands as evidence that the team owners simply want more money for themselves. And Craggs smartly points out that since the G-3 program ran dry in ’07, that left some owners in the lurch:

[T]he case could be made that the real dispute at the heart of the lockout lay between the owners who’d exploited the G-3 program to build bright new revenue-generating stadiums and those who hadn’t and now couldn’t because their peers had burned through the fund. In this light, the lockout looks like something else entirely — less a battle between management and labor and more a proxy war in which the owners, unwilling to fight each other for money, decided to extract it from the players instead.

The full report is on the next page. Enjoy.

Nfl Ventures

News

New CPA Sick of Bare Office Walls, Wonders When Certificates Will Arrive

Caleb Newquist
July 15, 2011

This just in:

I had a question regarding when you receive those frameable versions of your CPA certificate. I passed and became licensed Oct. of 2010. The [Connecticut State Board of Accountancy] just sent my SBOA CPA certificate (the fancy frame-able one). But I have seen in other people’s (who have their CPA) offices that they have frameable certificates from their state’s SBOA, AICPA and state society (i.e. CT Society of CPA’s).

When do you get the AICPA and State Society of CPA’s version of the frame-able certificate? I want to hang them up…otherwise what else is earning a CPA good for (other than that whole making a living thing).

Just for grins, I called up the State Society of CPAs in the Constitution State only to leave a voicemail with their membership coordinator. I also emailed the AICPA’s VP of Students, Academics, and Membership, so I’ll let you know if I hear anything.

And since it’s been a number of years since I’ve passed the CPA and my memory isn’t what it used to be, I can’t really speculate as to the length of your wait. If others are more familiar with the timeliness or lack thereof as it relates to your paper trophies, please inform our inquisitor by commenting below. In the meantime, maybe he should just get one of those old Farrah Fawcett posters? Other suggestions would be welcome.

Who Is Bizarro Grover Norquist?

Caleb Newquist
July 15, 2011

If you’ve been keeping up with things, you’ve noticed that Americans for Tax Reform founder and president Grover Norquist is everywhere. He’s like some sort of omnipresent Swedish tax assassin superhero (it helps having an active blog and Twittertter.com/#!/GroverNorquist”>accounts).

He’s getting Presidential candidates to sign his Taxpayer Protection Pledge; he’s preparing for inevitable destruction of our nation’s capital; he’s going on the Colbert Report to make grandmothers everywhere shake in their orthopedic shoes.

This PR assault has resulted in a flurry of blog posts from us (okay, just me) on GN’s wily ways, mostly because we admire said wiliness, political tenacity and overt sarcasm and sass. However, a question has now been asked by Joseph Thorndike that we had not previously considered Who is the anti-Grover Norquist? That is, who is the progressive stalwart on tax policy? Presumably someone who would argue that we need to always raise taxes in every instance possible and any time taxes are cut, a corresponding elimination of tax expenditures would occur. Okay, maybe I’m being a tad literal. Anyway, Thorndike gives it a shot:

During the NPR interview, I was asked if I could think of a left-leaning counterpart to Norquist. I was stumped. A bunch of people came to mind, notably Bob McIntyre at Citizens for Tax Justice and Bob Greenstein at the Center for Budget and Policy Priorities. But neither seemed to fit the bill very well. Sure, McIntyre and Greenstein have been important and highly influential voices for progressive tax policy. But neither has reshaped political debate in Norquistian fashion.

In my opinion this is an futile exercise since the bizarro version of the Taxpayer Protection Pledge would be the political equivalent of guzzling arsenic. Americans don’t like taxes, so there’s virtually nothing to be gained by taking the 180 degree positions of Norquist (again, in their purest form). Similarly, the organization “Americans for Tax Reform” sounds quite sensible. An organization named “Americans for Keeping This God-awful Fuckshow of a Tax System the Way It Is” on the other hand, is less attractive.

Thorndike then posits that guys like McIntyre and Greenstein are “entirely too knowledgeable when it comes to tax policy to ever be compared to Norquist.” Fine. So Grover isn’t as tax wonky as those other guys. Policy wonks typically don’t make good political tacticians and certainly don’t make for good politicians. Wonks look at actual numbers, facts and statistics to make conclusions. Lots of politicians struggle with English. Norquist is acutely aware of this and relies on speaking to them in terms they can understand, such as, “You raise taxes and I’ll end your political career.” Politicians can understand that. They cannot understand Howard Gleckman.

So bizarro Grover Norquist, if you’re out there, please make yourself known. Every (super)man needs a nemesis.

Not Grover: Who’s the Progressive Counterpart to Norquist? [Joseph Thorndike]

DOJ Curious to Know if Credit Suisse Pulled a UBS

Caleb Newquist
July 15, 2011

That is, helped American clients stash money offshore.

Credit Suisse said Friday it had been notified that it was the object of an investigation by the United States Department of Justice, citing “a broader industry inquiry.” The Swiss bank said that it had previously received subpoenas and other information requests from the Justice Department and other government agencies regarding cross-border services that its private banking arm provided to American clients.

As you may recall, the situation for UBS didn’t turn out so well and they sorta went back on that whole “secrecy” thing. Unfortch for Credit Suisse, they’ll probably have to snitch too:

On Friday, a court in Lausanne upheld the Swiss government decision to force UBS to hand over client data, citing “virtually uncontrollable economic repercussions for Switzerland” if it had not done so. That decision implies that Credit Suisse, too, may be ordered to surrender information about customers’ accounts to American authorities.

Credit Suisse Discloses U.S. Inquiry Into Private Banking [DealBook]
Earlier: DOJ: You Bet Your A$$ We’re Going After More Offshore Tax Evaders

CPA Exam

CPA Exam Marketing, You’re Kind of Doing It Wrong

Adrienne Gonzalez
July 15, 2011

I don’t say this to be mean, I say this to be helpful I swear. I noticed something sketchy about this Becker marketing campaign.

Apparently they have a Posterous (news to me) and share CPA exam tips. That part sounds awesome but somehow it fails in the execution. Here’s what I mean:

Did you know that the sections of the CPA Exam have different time allotments?

You can use as much of the time allotted to complete each section as you like. The testing computer screen displays a countdown of the time you have left. As you practice, it’s important to learn how to budget your time wisely, so you don’t find yourself scrambling at the end to finish.

Sorry but that’s horribly vague. What is that supposed to tell someone about time allotments on the CPA exam? What on Earth is ‘You can use as much of the time allotted to complete each section as you like?’ supposed to mean? Sure you technically can use as much of the time allotted (I’m assuming they mean per section?) but I don’t think that’s a very helpful suggestion to give someone actually trying to pass the CPA exam.

In a different post, they also say “Getting your CPA is a little like getting to Carnegie Hall — it’s all about practice!”

Each post ends with an obvious link to one of their products that is tangentially related to whatever the vague “tip” says.

In fewer words, WTF purpose is this supposed to serve?

Like I said, meant to be useful, I swear.

Accounting News Roundup: Fewer Tax Changes in Possible Debt Deal; Ernst & Young and News of the World; Minnesota Is (Almost) Open for Business | 07.15.11

Caleb Newquist
July 15, 2011

As White House talks falter, Senate works on agreement to raise debt limit [WaPo]
President Obama prepared Thursday to bring bipartisan talks over the debt to a close, as Senate leaders worked across party lines to craft an alternative strategy to raise the nation’s $14.3 trillion debt limit and avert a government default. “It’s decision time,” Obama told congressional leaders after meeting at the White House for a fifth straight day. Obama gave Republicans until early Saturday to tell him whether any of three options for trimming the federal budget would win GOP support.

Rebekah Brooks ’s British Subsidiary [NYT]
After days of mounting pressure from politicians and investors, Rebekah Brooks, the embattled chief executive of Rupert Murdoch’s British newspaper operations, announced her resignation on Friday in another stunning blow to Mr. Murdoch’s once all-powerful empire, now facing investigation by authorities in Britain and the United States.

Smaller Tax Changes on the Table [WSJ]
The scope of possible tax changes in a deficit-reduction deal has narrowed so sharply in recent days that taxes might disappear from a final deal altogether. Congressional Republicans have warned they won’t accept any tax increases, while President Barack Obama has repeatedly insisted that any agreement to curb budget deficits be “balanced” by both spending cuts and increased tax revenue. The two sides have inched closer over the past days. Some, but not all, Republican negotiators have said they would consider ending some tax breaks if their value was offset by tax cuts, resulting in no net increase in revenue. And White House officials dropped on Wednesday a requirement that a deal result in increased revenue.

NOTW case raises questions over auditor’s role [FT]
Allegations of police bribery at the News of the World have raised fresh questions about the role of auditors and their responsibility for preventing corporate wrongdoing. But as preparations are made for a judge-led inquiry into the disgraced tabloid, the firm that vetted its accounts seems unlikely to face investigation by audit regulators, at least not in the coming weeks. For almost a decade, Ernst & Young has audited News Group Newspapers, an arm of the US-based News Corp that contains the now-defunct News of the World and its sister tabloid, the Sun. It also audits News Corp.

Minnesota governor, GOP lawmakers agree to end shutdown [WaPo]
Minnesota’s two-week-old government shutdown moved toward resolution Thursday, as Gov. Mark Dayton (D) and Republican legislative leaders agreed to a deal for closing the state’s $5 billion budget gap without a tax increase. Speaking to reporters outside his office after emerging from a nearly three-hour meeting with GOP legislative leaders, Dayton said that the government shutdown would end as soon as lawmakers flesh out details of the agreement and move them through a special session of the Legislature. Officials said that should happen “within days.”

Going In Circles: A Few Remarks On Audit Reform [Re:The Auditors]
The Billy Preston video is an especially nice bonus.

News

Some Internal Auditors Spent £5,000 on a Bongo Drumming Team-Building Event at a Burlesque Club

Caleb Newquist
July 15, 2011

Building rapport on a team is important. Getting to know the guy/girl next to you in the trenches makes for a stronger unit and the willingness to help each other out when necessary. This can be accomplished in a number of ways. The occasional happy hour. A pool party. And yes, sometimes team building can occur in more tantalizing environment. But with musical instruments? Apparently.

Internal auditors from the Department of Communities and Local Government spent almost £5,000 on a bongo drumming team-building event held at a burlesque club. The vitriolic exposé from the Conservative Party said the department under the Labour government “policed wasteful spending”. Apparently the club’s dancers, Lady Beau Peep and “showgirl sensation” Amber Topaz, were not present during the event.

Bongos help internal auditors spend £5,000 [Accountancy Age]

When It Rains, It Pours: R. Kelly Hit with Tax Lien

Caleb Newquist
July 15, 2011

If you’ve been poking around the web the last couple of days, you probably heard that R&B singer R. Kelly is in danger of getting thrown out of his house. It’s an unfortunate turn of events for RK who stopped paying his mortgage payments trying to strongarm JP Morgan into modifying his loan.

Unfortunately for R., it appears he also has blown off the IRS. Delinquent celebrity taxpayer scoop artist Robert Snell reports:

Music industry bad boy R. Kelly has more than foreclosure to worry about. Kelly, the controversial R&B star owes more than $837,000 in delinquent federal taxes, records show.

Snell reports that the IRS released a $1 million lien just last month against RK, so it’s unclear if this little oversight is the result of his JPM negotiating strategy or he’s still getting caught up on things.

R. Kelly believes he can fly — from tax bill [Tax Watchdog]

Ron Paul Is the Latest GOP Presidential Candidate to Sign the Taxpayer Protection Pledge

Caleb Newquist
July 14, 2011

And you can bet that it’s going to straight to the vault.

[via @GroverNorquist]
Earlier:
Mitt Romney Unable to Resist the Siren’s Call That Is the Taxpayer Protection Pledge

IFRS

IASB Chairman: You Can’t Stop IFRS; You Can’t Even Hope to Contain It

Caleb Newquist
July 14, 2011

“It is my strong conviction that the momentum behind IFRS is so strong right now it can only be delayed but it cannot be stopped any more,” IASB’s chairman Hans Hoogervorst said.

The United States has an “extremely important” decision to make this year on whether to replace its own Generally Accepted Accounting Principles (GAAP)standard with IASB rules, Hoogervorst told a webcast meeting of the IASB’s trustees in New York. By next year two thirds of the world’s top 20 economies (G20) will be allowing or requiring local listed companies to use the IFRS accounting rules. [Reuters, Earlier]

KPMG

KPMG Suggests Toronto Let the Lawn Get Out of Hand a Bit, Wait Longer to Shovel Snow to Cut Some Spending

Caleb Newquist
July 14, 2011

The City of Toronto needs some help with ideas of how to cut some spending in their budget. STAT. Enter KPMG. They have to find savings where they can and sometimes that means making suggestions that may not go over so well. For example, those perfectly manicured lawns you see around the city? That’s due to a weekly grass cutting regimen. And guess what? It’s gotta go:

The report […] says weekly grass cutting may not be necessary except for “high-use surfaces” such as playing fields. Public works chair Councillor Denzil Minnan-Wong recently complained that a wet spring had grass and weeds growing out of control on city sites and called for more grass cutting.

Can you imagine if the City of New York let the grass go for an extra few days? You can just imagine the outrage. Anyone with a park view would be calling up 411 to complain that they can see “weeds” and “that jungle of a lawn” from their veranda on the 20th floor. “Absolutely shameful,” they’d say. Not sure if Toronto’s residents are so hung up on those sorts of details but it stands to reason that there are at least a few citizens who are meticulous about the city’s lawns.

Anyway, KPMG had another suggestion:

KPMG says the city could wait for more than five centimetres of snow before clearing parking lots and pathways, although there would be increased risk of “slip and fall claims.”

Of course Canadians are little tougher when it comes to the snow, so a couple more inches of snow is probably NDB. But with the offset of increased “slip and fall claims” this could be a net zero effect.

But the best savings idea of all? Those zoos and “farm attractions” that your kids love so much? Those should probably go too:

“Consider elimination of the zoo and farm attractions . . . Some zoo and farm attractions could be closed, however, these are enjoyed by many Toronto residents,” the report states.

Happy families out on a Sunday be damned! There’s a fiscal crisis to be averted! The city still has to decide whether to implement these suggestions but if they do, KPMG will have crying children to answer to. Ones that aren’t employees.

Close small zoos and Riverdale Farm, consultant suggests [Toronto Star]

News

This EU Guy Really Doesn’t Like the IASB’s New Magical Fair Value Plan

Adrienne Gonzalez
July 14, 2011

In case you thought the fair value debate was limited to the U.S. circa 2008, think again. A rule you probably haven’t heard of (but will likely see a version of once government debt becomes as much of a pain in the ass here as it has been in Europe) called IFRS 9 (which replaces IAS 39) would allow banks to price some government debt on their books at cost, instead of current awful prices.

Apparently the European Union doesn’t like this idea. EU Internal Market Commissioner Michel Barnier told a webcast meeting in New York this week “I do not believe this will be the first solution to the problems we face in Europe at the moment,” referring to IFRS 9‘s creative interpretation of “fair value.” Ironically, IFRS 9 accomplishes this feat by eliminating available for sale and held-to-maturity classifications for bonds, leaving only amortized cost and fair value.

IASB Chairman Hans Hoogervorst insists this plan is really only the suck less option, not some sort of magical accounting trick that will suddenly make Greece solvent and Irish banks healthy. “Under IFRS 9 impairments will still be painful but I am convinced it would be more timely done because the cliff effect is much less severe,” he said at a recent joint meeting of the IASB’s trustees and monitoring board of public officials, including Michel Barnier.

EU’s Barnier says won’t budge on accounting rule [Reuters]

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