As an adopted San Antonian (or Houston refugee), I’ve come to enjoy life in the Alamo City.
The latest San Antonio Business Journal includes a supplement called All About San Antonio. The supplement contains all sorts of factual information regarding our fair city. I encourage you to pick up a copy. If you study the information, you will find a number of things that are positive. Unfortunately, there are a few items that are not that great.
Very few people outside of San Antonio realize that we are the seventh largest city in the country. In fact, we are larger than Dallas, which is eighth. Take that AT&T!
Here are some other interesting tidbits. The number of homicides has remained the same over the last three years. You would never know that by watching the six o’clock news. Theft is up 25% over the same period. So I guess you can expect to be burgled, but not shot.
The median priced home in 2008 was $151,000 in San Antonio versus $197,000 nationally. The median family income was $57,000 here and $64,000 for the nation. Our per capita personal income was $34,937 which was 189th in the country. Unemployment is just under 8%, which is well below the national average. In other words, people are working, but they are not being paid very much. So, while call center employment growth is good for the employment numbers that the mayor brags about, it really doesn’t put much money into the economy.
This trend will probably continue as long as the available quality of education is substandard. Companies with big paying jobs are not going to invest in communities that provide poor education for their families…..it is just that simple.
Of the sixteen school districts listed in the article, three districts were rated “Unacceptable” and seven districts were rated as “Acceptable”. “Acceptable” means that the district met no more than the minimum standards (good job Alamo Heights-you meet minimal standards). “Acceptable” is nothing to shout about. There were six recognized districts. Of this group, three were at the military bases. HEY, MAYBE DISCIPLINE MAKES A DIFFERENCE IN EDUCATION ………
The substandard schools were in the predominantly Hispanic neighborhoods. Hispanics have the highest drop out rate in Texas. Hispanics have the smallest percentage of kids going to college in Texas. If you are Hispanic, and you want your kids have income that is 189+th in the country, and their kids to have income that is 189th, then continue with your current attitude toward education.
In 2040, San Antonio is projected to have a population of 2.5 million people. Of these, 1.5 million will be Hispanic. That is 61% of the population. That would be 1.5 million people in our beautiful city making far below the national income median.
So my charge to my Hispanic friends is: “Get off your butt and make a difference unless you want to live in McAllen North!”
Wednesday, September 29, 2010
Wednesday, September 22, 2010
IFRS VS. GAAP
A potential audit client recently came to us requesting a bid for an audit prepared under International Financial Reporting Standards (IFRS). This may be a first for us, but it definitely will not be the last. IFRS is taking the American audit community by storm.
Just the other day, as I was browsing audit reports online, I came across the Georgetown Chamber of Commerce report. Interestingly enough, the report complied with IFRS, not Generally Accepted Accounting Principles (GAAP). While IFRS has not yet become a requirement, it has certainly become a viable option for many organizations. So what, exactly, is the difference between IFRS and GAAP?
INTRODUCTION TO IFRS
The globalization of business and finance has led to mass adoption of IFRS in more than 110 countries. In the next three years, it is expected that 150 countries will mandate or allow IFRS. Canada, India, and Japan plan to adopt IFRS in 2011 with Mexico following suit in 2012. IFRS has the potential to enhance the quality of reporting and decrease the costs of preparing and interpreting financial statements.
DIFFERENCES BETWEEN IFRS AND GAAP
Revenue Recognition
With respect to revenue recognition, US GAAP is much more detailed and industry-specific. IFRS mentions just two main revenue standards along with a couple of interpretations related to revenue recognition as guidance.
Expense Recognition
There are also some significant differences with expense recognition in regards to when an expense should be recognized and the amount that should be recognized. IFRS recognizes the expense of certain stock options with vesting over a period of time sooner than GAAP.
Financial Instruments
Some significant differences exist in the area of financial liabilities and equity. While an instrument may be regarded as equity under GAAP, it may be considered as debt under IFRS.
Consolidation
GAAP has several criteria for consolidation while IFRS allows consolidation based on the power exercised by the company on the financial operational policies of the other entity.
Inventory Methodology
GAAP offers companies the option of using the last in, first out (LIFO) inventory methodology whereas IFRS forbids this type of inventory costing.
The above are just a few of the major differences and possible changes when converting to IFRS. For more information on IFRS requirements and transitioning to IFRS reporting, check out pcaobus.org or contact our office.
Just the other day, as I was browsing audit reports online, I came across the Georgetown Chamber of Commerce report. Interestingly enough, the report complied with IFRS, not Generally Accepted Accounting Principles (GAAP). While IFRS has not yet become a requirement, it has certainly become a viable option for many organizations. So what, exactly, is the difference between IFRS and GAAP?
INTRODUCTION TO IFRS
The globalization of business and finance has led to mass adoption of IFRS in more than 110 countries. In the next three years, it is expected that 150 countries will mandate or allow IFRS. Canada, India, and Japan plan to adopt IFRS in 2011 with Mexico following suit in 2012. IFRS has the potential to enhance the quality of reporting and decrease the costs of preparing and interpreting financial statements.
DIFFERENCES BETWEEN IFRS AND GAAP
Revenue Recognition
With respect to revenue recognition, US GAAP is much more detailed and industry-specific. IFRS mentions just two main revenue standards along with a couple of interpretations related to revenue recognition as guidance.
Expense Recognition
There are also some significant differences with expense recognition in regards to when an expense should be recognized and the amount that should be recognized. IFRS recognizes the expense of certain stock options with vesting over a period of time sooner than GAAP.
Financial Instruments
Some significant differences exist in the area of financial liabilities and equity. While an instrument may be regarded as equity under GAAP, it may be considered as debt under IFRS.
Consolidation
GAAP has several criteria for consolidation while IFRS allows consolidation based on the power exercised by the company on the financial operational policies of the other entity.
Inventory Methodology
GAAP offers companies the option of using the last in, first out (LIFO) inventory methodology whereas IFRS forbids this type of inventory costing.
The above are just a few of the major differences and possible changes when converting to IFRS. For more information on IFRS requirements and transitioning to IFRS reporting, check out pcaobus.org or contact our office.
Wednesday, September 15, 2010
Doom’s Day
Today, September 15, 2010, is the final deadline to file corporate tax returns if an extension was requested. If you haven’t gotten the work in to your local CPA or begun work on the return yourself, you’re looking to perhaps pay some penalties and interest.
If you have a balance due on a late tax return, the Internal Revenue Service will calculate further penalties and interest. Here’s what to look out for:
Failure to File Penalty
If you do not file your return by the due date, with or without an extension, you may be stuck with a failure to file penalty. The penalty is 5% of the tax not paid by the due date for each month or part of a month that the return is late. If your return is more than sixty days late, the penalty will be the lesser of $100 or 100% of the balance due. If you can show reasonable cause as to why the return was filed late, you will not have to pay.
Failure to Pay Penalty
This penalty is pretty self explanatory. Until the full balance is paid on the return, there will be a 0.05% penalty for each month the balance is not paid in full. There is no limit on the failure to pay penalty.
Interest
Generally speaking, the IRS will waive some penalties but will be VERY hesitant to waive any interest fees. Interest rates are set quarterly and are calculated based on how much tax you owe. The underpayment tax is currently 4% per year.
Prepare yourself for tax season and its deadlines. If you feel like you cannot make the deadlines, file an extension. Remember it is ALWAYS beneficial to file sooner than later.
If you have a balance due on a late tax return, the Internal Revenue Service will calculate further penalties and interest. Here’s what to look out for:
Failure to File Penalty
If you do not file your return by the due date, with or without an extension, you may be stuck with a failure to file penalty. The penalty is 5% of the tax not paid by the due date for each month or part of a month that the return is late. If your return is more than sixty days late, the penalty will be the lesser of $100 or 100% of the balance due. If you can show reasonable cause as to why the return was filed late, you will not have to pay.
Failure to Pay Penalty
This penalty is pretty self explanatory. Until the full balance is paid on the return, there will be a 0.05% penalty for each month the balance is not paid in full. There is no limit on the failure to pay penalty.
Interest
Generally speaking, the IRS will waive some penalties but will be VERY hesitant to waive any interest fees. Interest rates are set quarterly and are calculated based on how much tax you owe. The underpayment tax is currently 4% per year.
Prepare yourself for tax season and its deadlines. If you feel like you cannot make the deadlines, file an extension. Remember it is ALWAYS beneficial to file sooner than later.
Thursday, September 9, 2010
Key Questions to Ask Payroll Processing Companies
There comes a time in every business when you must decide how to conduct payroll. Many business owners begin by conducting their own payroll. With constant change in the laws and hefty penalties for disobeying the federal and state guidelines, most business owners decide to outsource the service to a payroll processing company. Before you decide, ask your prospective payroll provider this list of key questions to ensure they are the right fit for your company.
1. Who am I going to be working with to conduct my payroll? Outsourcing your payroll to a smaller CPA firm or payroll company usually gives you A LOT more personal time with your payroll representative. If you have a question, are you one phone call away from your person of contact or are you going to sit on hold for twenty minutes?
2. What steps does the company take to stay in compliance with the ever so often changing payroll laws? Ask what measures are taken to stay in compliance with the IRS, Social Security Administration and the Department of Labor. Find out when and how ALL federal, state, local, and unemployment taxes are paid accurately and on time.
3. How can I pay my employees? Do you offer direct deposit, check stuffing and mailing and can you possibly deliver the checks? What are the options for reporting the hours? Will it be as simple as emailing them over, a phone call or an online portal where the employees can log in their own hours?
4. What am I paying for? Ask what the services INCLUDE. Find out if new hires, quarterly, year end, and W2 report filing are an additional cost to the services provided. Most, if not all, payroll processing companies charge based on the number of employees. Make sure you find out how your rates will change when your company expands. Find out if they offer any employee benefit services associated with their services as well.
5. What is the company’s confidentiality policy? Make sure that your employees and your company are protected. Find out what the policy is and make sure you feel confident that your information will be protected.
If you’re looking to take some of the burden associated with payroll off your shoulders, outsourcing your payroll is an excellent option. To prevent future headaches, make sure you ask the prospective payroll company all the right questions to insure your company is going to get the best service possible.
1. Who am I going to be working with to conduct my payroll? Outsourcing your payroll to a smaller CPA firm or payroll company usually gives you A LOT more personal time with your payroll representative. If you have a question, are you one phone call away from your person of contact or are you going to sit on hold for twenty minutes?
2. What steps does the company take to stay in compliance with the ever so often changing payroll laws? Ask what measures are taken to stay in compliance with the IRS, Social Security Administration and the Department of Labor. Find out when and how ALL federal, state, local, and unemployment taxes are paid accurately and on time.
3. How can I pay my employees? Do you offer direct deposit, check stuffing and mailing and can you possibly deliver the checks? What are the options for reporting the hours? Will it be as simple as emailing them over, a phone call or an online portal where the employees can log in their own hours?
4. What am I paying for? Ask what the services INCLUDE. Find out if new hires, quarterly, year end, and W2 report filing are an additional cost to the services provided. Most, if not all, payroll processing companies charge based on the number of employees. Make sure you find out how your rates will change when your company expands. Find out if they offer any employee benefit services associated with their services as well.
5. What is the company’s confidentiality policy? Make sure that your employees and your company are protected. Find out what the policy is and make sure you feel confident that your information will be protected.
If you’re looking to take some of the burden associated with payroll off your shoulders, outsourcing your payroll is an excellent option. To prevent future headaches, make sure you ask the prospective payroll company all the right questions to insure your company is going to get the best service possible.
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