05 Jun 2022
0

Highlights from the Latest ACFE Fraud Report

Roger Rossmeisl, CPA
Fraud Briefs
Highlights from the Latest ACFE Fraud Report

Preventing, detecting, and investigating occupational fraud requires a deep understanding of the types of schemes, potential financial losses, emerging threats and risk mitigation strategies. To that end, the Association of Certified Fraud Examiners (ACFE) has published its “Report to the Nations,” the preeminent source for occupational fraud statistics and trends, every two years since 1996. The 2022 ACFE report covers 2,110 occupational fraud cases in 23 industries and in 133 countries. Surveyed organizations have lost more than $3.6 billion to fraud. The report can help your organization understand and mitigate fraud threats. Here are some of the highlights. Three types The ACFE divides occupational fraud schemes into three types: Asset misappropriation.  This includes cash theft, fraudulent disbursements, larceny and misuse of inventory and is the most common type of...

30 May 2022
0

Autonomous Ride-Hailing Will Displace Industry Incumbents

Roger Rossmeisl, CPA
Automotive, Technology
Autonomous Ride-Hailing Will Displace Industry Incumbents

As posted to the ARK Invest YouTube Channel on 5/19/22 (Run Time: 16 min, 20 sec) ARK Invest believes that autonomous ride-hailing will reduce the cost of mobility to one-eighth the average cost of ride-hail today, spurring widespread adoption and unleashing unprecedented economic productivity.  ARK believes that this could be "one of the most meaningful economic productivity delivering innovations of all time" and the GDP contribution from autonomous ride-hail systems could total around $26 trillion by 2030. Originally aired on 1/25/22, Big Ideas Summit 2022 features in-depth presentations from ARK's research team and seeks to educate attendees on the impact of breakthrough technologies and the investment opportunities they could create. (This is Blog Post #1209) ARK Invest ARK is an investment manager focused solely on disruptive innovation. Rooted in over...

28 Mar 2022
0

Why What an S Corp Shareholder Receives and Reports is Different

Roger Rossmeisl, CPA
Small Business Tax Briefs
Why What an S Corp Shareholder Receives and Reports is Different

You may have wondered why, in a given year, you may be taxed on more S corporation income than was distributed to you from the S corporation in which you are a shareholder. The answers lies in the way S corporations and their shareholders are taxed. But before explaining those rules, be assured you that when you are taxed on undistributed income, you won't be taxed again if and when the income ultimately is paid to you. Unlike a regular or C corporation, an S corporation generally isn't subject to income tax (California does charge a 1.5% entity-level tax). Instead, each shareholder is taxed on the corporation's earnings, whether or not the earnings are distributed. Similarly, if an S corporation has a loss, the loss is passed...

21 Feb 2022
0

Don’t Discount the Key Person Discount

Roger Rossmeisl, CPA
Automotive, Valuation Briefs
Dont Discount the Key Person Discount

In the fourth quarter of 2021, CEO resignations were up 16% over the prior year, according to executive outplacement firm Challenger, Gray & Christmas. Recent and announced high profile departures include Twitter’s Jack Dorsey, Amazon’s Jeff Bezos and American Airlines’ Doug Parker. This trend is expected to continue into 2022 as executives swap high-stress positions for more family time. Would your business survive if its CEO or founder suddenly jumped ship? Large public companies often have deep management structures and succession plans in place. So, they can usually recover from the loss of a C-level executive over time, except in rare instances. It’s more common for smaller businesses to depend heavily on a key person — and the actual, or even the potential, loss of that...

26 Jan 2022
0

How Entrepreneurs Expenses are Claimed on Tax Returns

Roger Rossmeisl, CPA
Small Business Tax Briefs
How Entrepreneurs Expenses are Claimed on Tax Returns

While some businesses have closed since the start of the COVID-19 crisis, many new ventures have launched. Entrepreneurs have cited a number of reasons why they decided to start a business in the midst of a pandemic. For example, they had more time, wanted to take advantage of new opportunities or they needed money due to being laid off. Whatever the reason, if you’ve recently started a new business, or you’re contemplating starting one, be aware of the tax implications. As you know, before you even open the doors in a start-up business, you generally have to spend a lot of money. You may have to train workers and pay for rent, utilities, marketing and more. Entrepreneurs are often unaware that many expenses incurred by start-ups can’t...

26 Jan 2022
0

The Cost Approach to Valuing a Business

Roger Rossmeisl, CPA
Valuation Briefs
The Cost Approach to Valuing a Business

The cost (or asset-based) approach to valuing a business focuses on the balance sheet. This financial statement reports “book values” for the company’s assets and liabilities. Here’s how the cost approach works and when it might be an appropriate method of valuation.  Book value vs. fair market value Amounts reported on a company’s balance sheet for its assets and liabilities may not reflect their fair market value to a potential buyer or seller. One reason is that, under U.S. Generally Accepted Accounting Principles (GAAP), assets are recorded at historic cost. Over time, historic cost may understate market value for appreciable assets, such as marketable securities and real estate. Additionally, internally generated intangible assets — such as copyrights, patents, brands and goodwill — are excluded from balance sheets prepared...

23 Jan 2022
0

Rethinking Humanity

Roger Rossmeisl, CPA
Technology
Rethinking Humanity

As posted to the RethinkX YouTube Channel on 11/04/2021 (Run Time 32 min, 32 sec) We are on the cusp of the fastest, deepest and most consequential transformation of civilization in history.  Yet while humanity is on the brink of this existential transformation, we’re blind to the deeper processes of change. "Rethinking Humanity" takes viewers on a whirlwind tour of the rise and fall of civilizations through a powerful lens that makes sense of the past, so that we can step into the present and create our future. Throughout history, the inability to see what is going on left society looking inward and backwards.  Desperate for stability and certainty.  Incapable of making a different choice.  The unavoidable result each time were efforts to patch up an order already in...

11 Jan 2022
0

When Subsequent Events Count

Roger Rossmeisl, CPA
Automotive, Valuation Briefs
When Subsequent Events Count

The value of a business interest is valid as of a specific date. The effective date is a critical cutoff point because events that occur after that date generally are not taken into account when estimating value. However, there are two key exceptions when subsequent events count. (1) When an event is foreseeable Subsequent events that were reasonably foreseeable on the effective date are usually factored into a valuation. That’s because, under the definition of fair market value, hypothetical willing buyers and sellers are presumed to have reasonable knowledge of relevant facts affecting the value of a business interest. Examples of potentially relevant subsequent events are: An offer to purchase the business, A bankruptcy filing, The emergence of new technology or government regulations, A natural or...

05 Jan 2022
0

Defer Tax with a Like-Kind Exchange

Roger Rossmeisl, CPA
Small Business Tax Briefs
Defer Tax with a Like-Kind Exchange

Do you want to sell commercial or investment real estate that has appreciated significantly? One way to defer a tax bill on the gain is with a §1031 “like-kind” exchange where you exchange the property rather than sell it. With real estate prices up in some markets (and higher resulting tax bills), the like-kind exchange strategy may be attractive. A like-kind exchange is any exchange of real property held for investment or for productive use in your trade or business (relinquished property) for like-kind investment, trade or business real property (replacement property). For these purposes, like-kind is broadly defined, and most real property is considered to be like-kind with other real property. However, neither the relinquished property nor the replacement property can be real property held primarily...

05 Jan 2022
0

What Factors into the Cost of Capital?

Roger Rossmeisl, CPA
Valuation Briefs
What Factors into the Cost of Capital?

Valuation experts often use discounted cash flow (DCF) techniques to determine the value of a business or estimate economic losses. A critical input in a DCF model is the cost of capital. This is the rate that’s used to discount future earnings into today’s dollars. Small changes in this rate can have a major impact on the expert’s conclusion, so it’s important to get it right. Debt vs. equity The term “cost of capital” refers to the expected rate of return that the market requires to attract funds to a particular investment. The cost of capital is based on the perceived risk of the investment. Risky companies (or investments) warrant a higher discount rate and, therefore, a lower value (and vice versa). A business can be financed with...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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