Accounting for Income Taxes: Change Is Coming

Article Abstract:

Controversy over income taxes has led the Financial Accounting Standards Board (FASB) to issue a discussion memorandum on the issues. Much of the controversy centers around deferred taxes. The three alternatives given are: comprehensive allocation, partial allocation and the flow-through method. Comprehensive allocation is the most consistent though it does not always show economic reality. Partial allocation is subject to management judgment. The show-through method is the simplest though it leads to the most volatile earnings. Proposed methods of measuring deferred taxes include: the deferred method, liability method, net-of-tax method, and combinations of the three.

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Current Value Accounting for S&Ls: A Needed Reform?

Article Abstract:

Savings and loan (S&Ls) associations are the biggest mortgage lenders. Financial statement users may be misled due to their reliance on historical cost valuation. Modifications made to save S&Ls during the recent credit crunch did not deal with their accounting procedures. Augmenting historical cost information with current value data would enhance financial information. Current value accounting would add relevance, reliability, comparability, and materiality to financial statements. Contra accounts could be used to enhance statements. An exhibit of a proposed balance sheet is included.

Savings and loan associations

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Meeting Accounting Deadlines

Article Abstract:

Working faster or longer are unfortunate habits of accountants nearing a deadline. Both lead to a reduction in quality and an increase in job dissatisfaction. The habit of working effectively should be fostered. It encompasses a realistic job assessment, fairly rigid scheduling, and immediate handling of necessary tasks.

Industrial efficiency, Economic efficiency

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