Audit & Accounting

Outside of tax preparation, few facets of accounting are as complicated and change as frequently as retirement and estate planning. Partly that is because of the enormous implications of taxes on these two areas. But it is also due to the changing demands of clients with each new generation of retirees.At this, the outset of the Baby Boomer generation, it is clear that clients are less responsive to complex reports and more interested in simple processes which they can participate in and understand via their own computers or over the Internet. Vendors of retirement and estate planning systems have responded to this need with a host of new collaboration tools and a dramatic improvement in comprehension for both the process and its reports.

A plan participant sometimes wants to provide a survivor annuity for a non-spouse beneficiary who is a child or other close relative of the participant, or a significant other who is not a spouse.Caution: If the participant has a spouse, a survivor annuity for a non-spouse beneficiary can be provided only if the spouse consents.

TRADING FUTURES ON DEBT SECURITIES: The Securities and Exchange Commission and the Commodity Futures Trading Commission have jointly proposed rules that would permit trading of futures on debt indexes in an effort to create a new class of tradable derivatives contracts.Futures contracts on debt indices that are allowed under the proposed rules would trade on futures exchanges subject to regulation by the CFTC. Securities futures on debt securities could be traded on futures exchanges and securities exchanges subject to regulation by the CFTC and the SEC. Under current regulations, trading futures on debt indices is essentially prohibited.

Ernst & Young has reportedly lost client data containing financial data from more than 240,000 Hotels.com customers.

The Public Company Accounting Oversight Board announced that it has scheduled a Standing Advisory Group meeting for June 12 and 13 in Washington.

The European Union's sales tax losses, now loosely estimated to have reached $120 billion per year and continuing to grow, are causing deepening concern among tax consultant professionals in Europe.In the U.S., high rates of sales tax losses due to exemptions on Internet shopping across state boundaries cost the authorities only a fraction of the losses in the EU, because rates are low compared with Europe's equivalent rates, which center around 20 percent.

With quixotic courage, the Governmental Accounting Standards Board has issued a preliminary views document on one of accounting's most confounding issues - reporting on derivatives.The suggested standard would require governmental financial statements to report derivatives at fair value in the balance sheet, unless the instrument is effectively hedging the risk that it was issued to offset. In such cases, the derivative's fair value would be reported in the balance sheet as either deferred charges or deferred credits, with no effect of fair value changes on the change statement.

In its first exercise of a new due process policy, the Financial Accounting Standards Board's Emerging Issues Task Force has issued three exposure drafts of proposed consensuses. The documents deal with accounting for contingently convertible, or CoCo, financial instruments, sabbaticals, and taxes.In the past, the task force has issued exposure drafts only when an issue seemed controversial or significant enough to warrant public comment. Under the new due process, all task force abstracts will be exposed for comment before being submitted to the board for final ratification.

IVAX RETAINS PWC: Ivax Diagnostics Inc., a Miami-based manufacturer and marketer of scientific instruments, medical diagnostic and autoimmune kits, has retained Big Four firm PricewaterhouseCoopers as its independent accountant.PwC succeeds Ernst & Young as Ivax's auditor.

After months of lobbying from businesses, it's beginning to appear that there's been some progress made in getting the Securities and Exchange Commission to reconsider parts of a proposal requiring companies to disclose the earnings of executives.