May, 2014 | RKL LLP
Posted on: May 27th, 2014

RKL Hosts Event To Celebrate Firm’s Success and Envision Future Insights

Following a successful busy season, RKL team members gathered together at the 2014 Firm Meeting on Wednesday, May 7 at the Ware Center in Downtown Lancaster, to celebrate the firm’s success and envision its future. This year’s event had its greatest attendance yet—a testament to RKL team members’ commitment and dedication.

With over 250 attendees from all RKL offices, the day provided insights on the firm’s future growth and highlights from the company’s 2013 achievements. As the largest accounting, tax, and business consulting firm headquartered in Central Pennsylvania, currently ranking #9 on Accounting Today’s “Fastest Growing Firms in the US,” and #72 in “Top 100 Firms” list, there is definitely much to celebrate.

The all employee meeting was themed around the recognition of what makes RKL as unstoppable, unlimited, and uncommon as it is today in the accounting industry. The event jumpstarted with a pastry-filled breakfast and mixer followed by a meaningful keynote presentation by Ed Monborne, CEO, and the firm’s functional department leaders. Presenters highlighted some of the firm-wide initiatives designed to nurture a strong foundation for RKL’s client-commitment focus and industry-specific expertise, which has been instrumental in fostering revenue growth of 36% over the past three years.

In the afternoon, RKL members were in for a surprise treat—John Garrett, comedian and writer, presented a hilarious stand-up comedy performance on the world of Corporate America and the accounting industry. To add onto the surprise, attendees were randomly pulled onstage for a RKL version of Family Feud. While the stand-up show was certainly met with much laughter, it essentially provided RKL with a unique team bonding experience.

A special thank you to all of our presenters:

  • Ed Monborne, CPA, CEO, RKL
  • Jeff Horst, CPA, partner, RKL, Tax Services
  • Jeff Boland, CPA, partner, RKL, Senior Living Services
  • Paula Barrett, CPA, partner, RKL, Business Consulting
  • Jim Pruzinsky, CPA, partner, RKL, Audit & Accounting
  • Joe Noll, President, partner, RKL eSolutions LLC, IT
  • David Engle, CPA, partner, RKL, Small Business Services
  • Danielle Hoffer, HR Director, RKL
  • Ellen Svrcek, Marketing Director, RKL

RKL CEO Edward Monborne presents keynote discussion on the firm’s growth and further expansion

RKL's Jim Pruzinsky presents a review on A&A's annual update and future goals

RKL’s Jim Pruzinsky presents a review on A&A’s annual update and future goals

Hundreds of RKL team members gathered at the Ware Center

Hundreds of RKL team members gathered at the Ware Center for an insightful presentation, luncheon and surprise show

RKL’s Jeff Boland discusses goals for Senior Living in the upcoming years

 

Comedian John Garrett presents a stand-up show on the accounting industry

Comedian John Garrett presents a stand-up show on the accounting industry

Team members were pulled onstage for a RKL-version of Family Feud

Team members were pulled onstage for a RKL-version of Family Feud

 

Posted on: May 19th, 2014

New FBAR Form for International Tax Reporting Purposes

international FBAR formHave bank accounts or other financial interests outside the United States? To avoid severe penalties from the IRS, you may need to take action now to stay in compliance with a new form due June 30, 2014. Here’s what you need to know about the new reporting requirement and the arsenal of other reporting requirements that the IRS has developed over the past several years to deter U.S. income tax evasion.

The New FinCEN Form 114

Now commonly referred to as “FBAR” and formerly known as Form TDF 90-22.1, the new FinCEN Form 114 must be electronically filed on or before June 30, 2014.

Who does this apply to?

U.S. persons (the term “U.S. person” applies to individuals or businesses) with a financial interest in a bank account or other type of financial account located outside the United States.  Reporting also applies to individuals who don’t have a financial interest in the bank account or other type of financial account, but who have signature authority for that account.

There are a number of exceptions for filing the annual FBAR, but here’s how you can determine whether this filing requirement applies to you: if the U.S. dollar value in a bank account or other financial account – or the combined value in several of these types of accounts – located outside the U.S. exceeds $10,000 at any point during 2013, an FBAR report is required to be electronically filed by the deadline.  Paper filing is no longer an option.

What’s the penalty for non-compliance?

A U.S. person who is required to file an FBAR, and who fails to properly file a complete and accurate FBAR, may be subject to a civil penalty of $10,000 per violation. If the failure is deemed to be willful, the penalty increases to the greater of $100,000 or 50% of the account balance. In some cases, criminal penalties can apply.

Other International Reporting Requirements by U.S. Persons

U.S. citizens and residents with assets in off-shore accounts and U.S. businesses with foreign affiliates and/or foreign transactions and foreign businesses with U.S. affiliates and/or U.S. transactions are subject to a cache of IRS reporting requirements.

A sample of these forms follows.*

  • Form 8938 – Statement of Specified Foreign Financial Assets
  • Form 5471 – Information Return of U.S. Persons with Respect to Certain Foreign Corporations
  • Form 5472 – Information Return of a 25% Foreign-Owned U.S. Corporation
  • Form 8865 – Information Return of U.S. Persons with Respect to Certain Foreign Partnerships
  • Form 8858 – Information Return of U.S. Persons with Respect to Foreign Disregarded Entities
  • Form 3520 – Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts
  • Form 1040-NR – U.S. Nonresident Alien Income Tax Return
  • Forms 8804 and 8805 related to U.S. federal income tax withholding requirements when a U.S. partnership has a foreign partner
  • Forms 1042, 1042-S and 1042-T related to U.S. federal income tax withholding requirements for payments made to a foreign persons
  • Form W-8 series related to withholding requirements for payments made to foreign persons

U.S. tax forms are continually being updated, added and deleted.  In addition to contacting your RKL tax advisor, see www.IRS.gov under the Forms and Publications section for further information.

debby_blogContributed by Debby H. Wells, manager, RKL’s Tax Services Group.  Debby has over 20 years of public accounting tax-related experience.  She specializes in middle-market federal and multi-state corporate and pass-through entity tax planning and compliance.  She also provides tax outsourcing services to public companies and private businesses to aid them in computing quarterly (and annual) income tax accounting provisions for their financial statements.

 * This list is not all-inclusive.

Posted on: May 12th, 2014

New Guidance Offers Alternative to VIE Accounting Model for Certain Common Control Leasing Arrangements

vie_5_14As a result of a recently issued Accounting Standards Update (ASU) from the Private Company Council (PCC),  private companies will now have an alternative option for accounting for certain common control leasing arrangements.  The new guidance will allow private companies to bypass the variable interest entity (VIE) accounting model in Topic 810 of the FASB’s Accounting Standards Codification (ASC) for common control leasing arrangements which meet certain criteria.  This guidance provides an alternative for private companies that, if elected, simplifies and reduces the costs of accounting for certain common control leasing arrangements.

ASU No. 2014-07, Consolidation (Topic 810): Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements, a consensus of the PCC, is effective for annual periods beginning after December 15, 2014.  Early adoption is permitted.

Details of the ASU

The guidance permits a private company to elect an alternative not to apply VIE guidance to a lessor entity if the following criteria are met: (a) the private company lessee and the lessor entity are under common control, (b) the private company lessee has a lease arrangement with the lessor entity, (c) substantially all of the activities between the lessee entity and the lessor entity are related to leasing activities (including supporting leasing activities) between those two entities and (d)  if the private company lessee guarantees or provides collateral for any obligation of the lessor entity related to the asset leased by the private company, then the principal amount of the obligation at inception of such guarantee or collateral arrangement does not exceed the value of the leased asset.

This alternative is an accounting policy election that, when elected, should be applied by a private company lessee to all current and future lessor entities under common control that meet the criteria discussed above.  Additionally, the accounting alternative should be applied retrospectively to all periods presented.

Under the alternative, a private company lessee would not be required to provide the VIE disclosures about the lessor entity.  Rather, the private company lessee would disclose (1) the amount and key terms of liabilities recognized by the lessor entity that expose the private company lessee to providing financial support to the lessor entity and (2) a qualitative description of circumstances not recognized in the financial statements of the lessor entity that expose the private company lessee to providing financial support to the lessor entity.  The disclosures under this alternative are required in combination with the disclosures required by other Topics (for example, Topic 460, Guarantees, Topic 840, Leases, and Topic 850, Related Party Disclosures) about the lessee entity’s relationship with the lessor entity. Those disclosures could be combined in a single note or by including cross-references within the notes to financial statements.

Considerations for Private Companies

The PCC reached a conclusion that this alternative accounting election to Topic 810 was warranted for private companies because of the cost and complexity of applying the VIE guidance and the lack of relevance to financial statement users when consolidating lessor entities under common control.  This guidance may be a viable option for many private companies.   In evaluating whether to adopt this guidance, private companies should first seek input and feedback from its financial statement users.    A private company should confirm with its financial statement users that they will accept financial statements in which this accounting alternative has been applied.  The users that should be included would include lenders, investors, and regulators, among others.

Have questions about this guidance? RKL is here to help. Contact your RKL advisor or one of our local offices for details and assistance in assessing the impact of adoption.

New Goodwill Accounting Guidance from PCCContributed by Michael P. Jones, CPA, a manager in RKL’s Audit Services Group. Mike specializes in serving the audit and accounting needs of commercial, not-for-profit and governmental organizations. 

 

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