The Last of the Busy Seasons
Busy Season may never be the same again.
February 5, 2009
This is traditionally the season when auditors and finance executives buckle down for a season of year-end closes, year-ahead budgeting and annual audits. No wonder they call it “busy season.”
But this may be the last of the “busy seasons” as many CPAs know it. That’s because so much is changing in accounting and auditing that future busy seasons could be a lot different from past busy seasons.
For one thing, this busy season comes at a time when CPAs and finance executives are looking hard at trimming costs wherever they can find them.
Now that Barack Obama has taken office, some may think that the nation is already on the way to recovery. “I’m not so optimistic,” says Lynn Northrup CPA, CPIM. “My advice is to prepare for a longer-term period of slow-economic activity, maybe as long as two to three years.”
“Your strategy needs to include a thorough understanding of your competition and markets,” Northrup says. “You will need to be aggressive and radically different to gain the necessary market penetration. Don’t think your sales volume will be like prior years. It’s probably going to be lower and with reduced profit margins. The world is different now. Keep reworking your strategy almost on a daily basis to make sure you’re on track. Agility is the key to survival.”
In addition, this may be one of the last “busy seasons” pre-IFRS. Although, the implementation timeline may be pushed back while the financial grapples with the global crisis, IFRS (International Financial Reporting Standards) or something like it, is bound to start replacing U.S. GAAP (Generally Accepted Accounting Principles) in coming years. The AICPA has posted a number of IFRS resources, including an IFRS Blog. Private companies, meantime, are awaiting the issuance of IFRS for Private Entities, which the IASB (International Accounting Standards Board) previously announced is expected to be issued in the first quarter of 2009.
And then there are the corporate tax changes that are throwing a wrench into this year’s busy season. For example, according to Eisner LLP:
In addition, a provision could be included in President Obama’s plan to reduce the top corporate marginal income tax rate by 4.5 percentage points, from the current 35 percent to 30.5 percent. However, the proposal would curtail some corporate tax benefits to pay for the rate reduction, like: repealing the domestic production activities deduction and the worldwide allocation of interest, limiting income tax treaty benefits for certain tax deductible payments and imposing additional limitations on U.S. corporations deferring income through controlled foreign corporations.
The Obama tax plan also includes expanded corporate expensing, loss carryback provisions and a bevy of energy provisions.
So stay tuned.
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About Rick Telberg
Rick Telberg is editor at large/director of online content.
Disclaimer: Any views expressed in this article do not necessarily reflect the views of the AICPA or CPA2Biz. Official AICPA positions are determined through certain specific committee procedures, due process and deliberation.