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Manufacturing Edge

Excess Capacity - Tax Advantage or Disadvantage?

In the December 2009 Manufacturing Edge, Brian Wiedenhoeft wrote the article “Excess Capacity: Accounting, Pricing and Production Issues,” which discussed the accounting implications of allocating overhead when production is below normal.  A capacity-based fixed overhead allocation allows, for book purposes,...

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The Federal Government to the Rescue: Five-Year NOL Carryback

From businesses to practitioners, it appears that all are praising the change to Net Operating Loss (NOL) carryback provisions in the Worker, Homeownership, and Business Assistance Act of 2009 (the New Act), signed into law November 6, 2009. The change...

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Review Your Capital Assets for Possible Impairments

As we put the recent recession in our rearview mirror and look ahead to the anticipated greener pastures of 2010 and beyond, it may be appropriate to review your company’s capital assets (land, buildings, machinery, and equipment) for potential impairments.U.S....

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Ensuring Timely and Accurate Financial Reporting for Your Foreign Subsidiaries

Make sure you have all the components in place for accurate, and timely, financial reporting from your foreign subsidiary.Recently we were asked to help a company set up the financial reporting infrastructure for a foreign subsidiary it had recently acquired....

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Issues Surrounding the Treatment of Business Combinations

In December of 2007, the Financial Accounting Standards Board (FASB) issued Statement No. 141(R), Business Combinations. This standard is now referred to as ASC 805 given the recently introduced FASB Codification. These rules have generated a significant level of discussion...

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Are We Coming Out of a Recession? Is it Time to Take the M&A Plunge?

The U.S. stock market is soaring, commodity prices are on the rise, and there are signs that consumer confidence is growing. The positive news is countered with growing bank failures, indications that banks are still not lending, persistent unemployment, and...

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LIFO and Decreasing Prices—The Perfect Storm?

Many manufacturers and distributors will default to utilizing the first-in, first-out (FIFO) method in valuing inventory. When raw material and product prices are increasing, older inventory items are replaced with new, higher priced inventory as products are sold. This method...

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Excess Capacity: Accounting, Pricing and Production Issues

The severe economic conditions experienced by multiple industries during the recent worldwide recession have several accounting, pricing and production implications. In many instances, companies have been forced to dramatically change their cost structure by reducing the size of their workforce,...

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Inventories - Lower of Cost or Market Considerations

Accounting for the cost of inventory is one of the most complex financial and management accounting challenges that manufacturers face. That said, accounting policies, which are required to be disclosed in financial statements, often sound similar. In most cases, an...

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Decrease Taxable Income at Year-End with Needed Upgrades

In February 2009, Congress passed The American Recovery and Reinvestment Act. This stimulus act provides many opportunities for taxpayers to save money, but most importantly, for businesses, the Act extends bonus depreciation from 2008 to 2009. By taking advantage of...

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Potential Payday for Propane Users

A refundable tax credit for the sale or use of alternative fuels and alternative fuel mixtures is available to provide relief for taxpayers from the fuel tax. The revenue collected from the fuel tax is committed to transportation and road...

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Take Advantage of Year-End LIFO Planning Opportunities

Even if you ruled out the LIFO (last-in, first-out) inventory method as a tax strategy in the past, now might be the time to give it another look. Until five years ago, many manufacturers' reasons for ruling out LIFO were...

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R&D Credit Offers Manufacturers Money-Saving Opportunities

When many business owners hear about research and development (R&D), they often think of scientists in lab coats creating new chemicals. So it's no surprise that these business owners might believe the income tax credit for research expenditures does not...

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Sales Tax Exemption Certificates: Get ’Em While They’re Hot

Sales taxes are tricky. Collect and remit tax from everywhere you sell and there's no cost to your business—or at least no direct, out-of-pocket cost. The customer pays the tax.The indirect cost of the time to administer the sales and...

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Know the Tax Implications of Financial Accounting Decisions

Accounting for the cost of inventory is one of the most complex financial and management accounting challenges that manufacturers face. Choosing from a wide range of costing methods, accurately entering inventory transactions into information systems and ensuring that management gets...

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Estate Planning Secret: How to Use Lack of Marketability

Owners of closely held companies often work diligently for 25 years or more to build the value of their business. But as these owners near retirement, all of their hard work—and the resulting increase in the value of their business—creates...

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What Should Midsize U.S. Manufacturers Know About Doing Business in China?

Is your company considering conducting business offshore? Consider the experience of one Blackman Kallick client, a mid-size manufacturer that has been sourcing product in China for more than 20 years. "Our company started doing business overseas primarily because of competition,"...

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Are You Properly Allocating Costs to Inventory?

Many people are confused over the extent to which overhead costs can be allocated to inventory. Current accounting standards allow for the allocation of variable production overhead to inventory based on actual use and fixed overhead based on the normal...

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Is Your Inventory Subject to Fraud Risk?

Inventory is highly susceptible to fraud in the form of misstated financial reporting and misappropriation of assets. Either type of fraud is detrimental to your company.How does inventory fraud occur?Including nonexistent inventory items in the physical count (e.g., empty boxes)Improperly...

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This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.