How Enforceable is Your Teaming Agreement?
A recent federal District Court ruling in Virginia determined that teaming agreements, including language that is equal to an agreement to agree, is not enforceable under Virginia law. Terms in a teaming agreement that state the parties will ‘negotiate in good faith the terms of a subcontract’ or that the ‘agreement shall terminate in the event that the parties cannot reach agreement on a subcontract’ are what the court determined to be an agreement to agree in the future and are unenforceable. A teaming agreement is commonly used in government contracting and is entered into between two companies that intend. Read More.
FASB Endorses Three Topics from the Private Company Council
Created in 2012 by the Financial Accounting Foundation, the Private Company Council (PCC) identifies, deliberates, & votes on proposed alternatives within existing U.S. generally accepted accounting principles (GAAP) for private companies. In addition, the PCC serves as an advisory body on active FASB projects. All recommendations of the PCC must be endorsed by the Federal Accounting Standards Board (FASB) before becoming GAAP. At its May 2013 meeting, the PCC approved three changes to GAAP for private companies. Today, the FASB endorsed the changes and will release exposure drafts for public comment later this month as part of the FASB due. Read More.
The Anatomy of Credit Losses: Proposed Accounting Standards Update, Financial Instruments – Credit Losses
The financial crisis that began in 2008 led to a chain of events, which included unprecedented provisions for loan losses, charge-offs of loan balances, foreclosures of real estate, as well as credit losses to other financial assets. The significant provisions for credit losses led to a decline in operating performance of financial services entities contributing to the erosion of many capital positions. The impact of the financial crisis increased industry and regulatory scrutiny related to the timing of the recognition of credit losses related to financial instruments as well as to the overall adequacy of credit loss reserves reported in. Read More.
Growth Slows in Number of New Nonprofits
Recent IRS statistics show a slowdown in year-over-year growth of new Nonprofit entities. In 2012, the sector added a net 1,761 new tax-exempt organizations. This small increase comes after 2011, when more than 200,000 groups lost tax-exempt status for failing to file informational returns for three years. That large loss of organizations stemmed from federal legislation passed in 2006. As the Chronicle of Philanthropy reports, nonprofit sector growth is still up dramatically in the last decade, nearly doubling in size from 516,554 in 1991 to 1.1 million in 2012. Click here to read the full article.
New IRS Head Vows to Restore Public Trust
The recently named Acting IRS Commissioner Danny Werfel has pledged to investigate and resolve internal issues which lead to the innapproporiate targeting of 501(c)4 groups based on political affiliation. Among the actions taken is the creation of a special team to address the backlog of applications for tax-exempt status. “I am prepared to follow the facts wherever they take us. It is the only way to restore trust,” Werfel told a sub-panel of the House of Representatives Appropriations Committee. The IRS has been at the center of a political scandal over the practice after the head of the tax-exempt unit, Lois Lerner,. Read More.
State Income Tax Increases Should Factor into Bidding
Last week, Minnesota became the most recent state to pass legislation increasing income tax rates. The increase, targeted primarily at the state’s high-income earners, pushed Minnesota’s top income tax bracket to 9.8%. Over the past year, California has seen its top bracket rate soar to a national high of 13.3%; Maryland has increased its highest rate to 8.95% before additional local taxes; and, pending a statewide vote, normally tax-friendly Colorado could see income tax rates rise to generate an additional $900 million in revenue. In addition, several other states, most notably Massachusetts, are currently debating revenue generating proposals. In light. Read More.