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Whether you’re selling your business or acquiring another company, the tax consequences can have a major impact on the transaction’s success or failure. Consider installment sales, for example. The sale of a business might be structured as an installment sale if the buyer lacks sufficient cash or pays a contingent amount based on the business’s…
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The statement of cash flows highlights the sources and uses of cash. It’s arguably the most misunderstood and underappreciated part of a company’s annual report. Here’s an overview of how this statement is organized and what the Financial Accounting Standards Board (FASB) has recently done to make it more user-friendly. Cash flows from operations The…
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If your business involves the production, purchase or sale of merchandise, your inventory accounting method can significantly affect your tax liability. In some cases, using the last-in, first-out (LIFO) inventory accounting method, rather than first-in, first-out (FIFO), can reduce taxable income, giving cash flow a boost. Tax savings, however, aren’t the only factor to consider.…
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Bonus depreciation allows businesses to recover the costs of depreciable property more quickly by claiming additional first-year depreciation for qualified assets. The PATH Act, signed into law a little over a year ago, extended 50% bonus depreciation through 2017. Claiming this break is generally beneficial, though in some cases a business might save more tax…
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If your business issues audited financial statements and follows a calendar year end, your external auditing procedures have already begun. At a minimum, you’ve signed an engagement letter, sent over preliminary financial statements and allowed your CPA to observe any year end physical inventory counts. But there are some steps you can still take to…
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