News and Events

In our first edition of this series we introduced the new Accounting Standard Update (ASU) No. 2014-09, Revenue from Contracts with Customers. This standard is specific and all-encompassing and the FASB (Financial Accounting Standards Board) provides  framework for applying core principles of the standard to recognize the value of revenue from contracts and when it is to be recognized. Step One begins with the business identifying contracts it has with its customers.
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The following is the first in our series of articles discussing the latest on the Revenue from Contracts with Customers standard, ASU (Accounting Standard Update) No. 2014-09, which was to be adopted by public companies by year end 2018. Our goal is to keep you informed on compliance requirements with one of the largest changes to revenue recognition standards expected to go into full effect for private companies by the end of 2019. We want to take advantage of the additional time available to provide guidance to these companies as the standard is extensive and will likely affect the business’s financial statements and business processes, resulting in significant preparation for compliance. One consideration is that potentially everyone who owns a business will be involved with the process. Additionally, thought should be given to existing contracts and terms, and companies must be ready to decide how to adopt the policy and must meet initial criteria to recognize the revenue.
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At Lawhorn CPA Group we work as a member of a team of professionals qualified in their respective fields on behalf of our clients. Whether you need additional assistance with tax attorneys, certified financial planners, or accountants, we seek to provide encompassing assistance to the owners of businesses in our community. With this in mind, we recognize that deciding on retirement plans is an enormous decision for business owners. Making the matter more complicated is the sheer volume of options from which to choose when deciding which retirement plan is right for you.  As a business owner, making so many important decisions can cause information overload or decision deadlock. To release some of the pressure, let’s look at your options as a business owner and see which retirement plan could fit best with your organization based on the numerous variables involved.

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In a 5-4 decision on Thursday, June 21, the Supreme Court ruled that states can collect online sales tax—discarding the court’s longstanding rule that states cannot require companies without a physical presence to collect sales taxes.  The decision reverses decades of history dealing with sales tax and retailers’ obligation to collect and remit tax when goods are sold across state lines.  The Supreme Court’s ruling opens the door for states to impose an economic nexus standard when it comes to sales tax collection responsibilities.
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Business owners are now reviewing the repercussions of the Tax Cuts and Jobs Act of 2017 or are planning to do so soon. Learning about how these changes will affect your business is an important step to take now in strategic business and tax planning for the years to come. While the majority of the Act’s key criteria are beneficial to businesses, there are several changes that affect only certain types of businesses, and other changes that affect the overall method of accounting a business can use. Perhaps one of the most significant changes made in the new tax overhaul is that more businesses can utilize the cash method of accounting.

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With its effect being immediate and unanswered questions lingering, the Tax Cuts and Jobs Act largely eliminates the deduction for entertainment expenses, and businesses should incorporate this change without delay.

Under the prior law, taxpayers were able to deduct 50% of expenses incurred for entertainment, amusement, or recreation directly related to the active conduct of a taxpayer’s business or trade.  The new law, however, generally eliminates the deduction for expenses paid or incurred after December 31, 2017.  Although there are a few exceptions, entertainment expenses are non-deductible as of January 1, 2018.  It has been made clear that a deduction is not permitted for a client entertaining at sporting events, on the golf course, or any similar entertainment expense.  What is less clear, though, is how food and beverage expenses or meals are affected.  The Joint Committee on Taxation (JCT) stated “taxpayers may still generally deduct 50% of food and beverage expenses associated with operating a trade or business;” however, the JCT did not define what expenses are associated with “operating a trade or business” other than it would include meals provided to employees traveling for work.  It is still unclear whether food and beverage expenses incurred in connection with an entertainment event will remain 50% deductible.

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With the most extensive overhaul of the U.S. tax code in more than three decades having now been passed by both Houses of Congress, and officially signed by President Trump to enact it into law, tax reform is here.  These changes will require businesses and individuals to re-evaluate their long-term tax strategies starting in the 2018 tax year, but also means taking immediate year-end tax planning strategies for the final days of 2017 into consideration.

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A few years ago, I attended the Winning is Everything conference put on by the Advisory Board in Las Vegas, NV.  A fitting place for a conference about winning!  There are so many topics to consider when choosing a conference, and I end up attending several a year to stay up with professional trends, pronouncements and the latest in technology for my profession:  Accounting, of course.  Though truth be told, I don’t consider myself much of an accountant in the traditional sense.  Not to worry, I’m not having a crisis of identity.  I just believe that there is a better description out there for what I do and what we do as a firm.

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We’re going back in time with this one,  I’m looking at Super Bowl XLVIII in 2013 between the Denver Broncos and the Seattle Seahawks.  The Seahawks came out on top with a whooping 43-8 score.  I’m not generally a big sports fan.  I don’t keep stats or play on fantasy leagues.  But I DO come from a college town–Knoxville, home of the Tennessee Volunteers, and most of Knoxville loves to follow Peyton Manning.  I am no exception.  When he is on his game, whether you love or hate him, he is unstoppable.  There is no denying it.  The night of Super Bowl XLVIII he and most of his team were not on their game, or they were thrown off their game, or, even worse, they threw themselves off of their own game.

I’m going to take the middle-of-the-road approach here and say it was a combination of all three.  What was interesting to watch, as long as I could bear to watch, was just how quickly the morale and energy left the Broncos.  They were so low even Life Alert couldn’t pick them up.

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