Contact Us Follow Us :      | Find Us |
CBIZgreenweb

Subscribe to Our Blog

Client Satisfaction Survey Results

Client-Satisfaction-New-England-NPS-CPAs

 

Follow Us

Tax Insurance: What It Is and Why You May Need It
Posted by George Cobleigh on May 26, 2022 4:03:56 PM

The current tax environment is complex, leaving many taxpayers feeling uncertain about their existing tax positions and future plans. In the face of an IRS audit or challenge, one unexpected tax liability can do severe damage, leading to a failed transaction or loss of expected tax benefits.

Read More

Topics: Taxes, Insurance, Private equity, venture capital, Private Equity & Venture Capital, PE/VC, portfolio companies, tax insurance

New GILTI Regulations Provide Relief for Taxpayers
Posted by Barret Pinto on Jul 23, 2019 12:16:00 PM

On June 14, the U.S. Department of Treasury (Treasury) and the IRS released final regulations for the tax on Global Intangible Low Taxed Income (GILTI), a provision that came from the tax reform law commonly known as the Tax Cuts and Jobs Act (TCJA). Concurrently, the Treasury and IRS released proposed regulations on Subpart F inclusions.

Read More

Topics: Private Equity & Venture Capital, PE/VC, portfolio companies, GILTI, global intangible low-taxed income

How the New Credit Loss Standard Affects M&A
Posted by Brendan Donovan on May 15, 2019 6:50:12 PM

Private equity and venture capital firms that have or are looking to invest in financial services portfolio companies should be aware of the coming changes in the way financial service entities calculate credit loss reserves. Starting in the calendar year 2020, private equity and venture capital firms that invest in certain types of portfolio companies will have to be aware of new accounting rules that affect the timing of credit loss recognition. The new credit loss impairment rules under the Financial Accounting Standards Board (FASB) Accounting Standards Update 2016-13, Financial Instruments (Topic 326) – Measurement of Credit Losses on Financial Instruments (ASU 2016-13) apply to financial instruments and loans measured at amortized cost. Due to the change in the recognition of credit losses, the credit loss impairment standard will affect financial statements and potentially business valuations of companies in the financial services sector.

Read More

Topics: Private Equity & Venture Capital, PE/VC, portfolio companies, CECL, Current Expected Credit Loss, CECL impairment model

The Challenge with EBITDA in Valuations
Posted by Brendan Donovan on Apr 11, 2019 1:24:14 PM

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is a common metric used by private equity fund managers to value investments made in portfolio companies. The advantage of EBITDA compared to net income is that the metric allows investment decisions and evaluations to be made while excluding the effects of financing and certain significant accounting decisions. Some also use it as an approximation of operating cash flows. The challenge with EBITDA is that the effect of upcoming accounting standards may make comparisons to prior periods difficult and could cause valuation and performance metrics to move in an unexpected manner. Three of the largest impacts may be in changes to the accounting for revenue recognition, leases, and cloud computing arrangements.

Read More

Topics: investments, Private Equity & Venture Capital, PE/VC, portfolio companies, portfolio companies investment, fund managers, EBITDA

Making Your Fair Value Disclosures More Useful
Posted by Brendan Donovan on Oct 22, 2018 11:27:53 AM

Investment fund managers should be aware of upcoming changes to the fair value measurement framework that will simplify the current fair value disclosure requirements. The FASB recently issued Accounting Standards Update (ASU) 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which is designed to make fair value disclosures align with the recently issued concept statement for notes to the financial statements. The applicability of the revisions contained in ASU 2018-13 differ for public and nonpublic entities.

Read More

Topics: investments, Private Equity & Venture Capital, PE/VC, portfolio companies, Valuation, portfolio companies investment, fund managers

Summary of Draft AICPA Valuation Guide for Venture Capital and Private Equity Funds
Posted by Brendan Donovan on Oct 16, 2018 11:07:19 AM

Last May, the American Institute of Public Accountants (AICPA) issued a working draft of a guide to help venture capital, private equity and other investment companies better value their assets. The Valuation Guide (“the Guide”), titled Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies addresses some of the concerns that have emerged over the years relating to divergent practices in estimating the fair value of portfolio company investments. It emphasizes specific techniques and provides industry-specific examples. Even though it is non-authoritative, the Guide reflects the best practices of applying U.S. Generally Accepted Accounting Principles (GAAP). In addition to considering the key provisions highlighted in this article, we encourage you to review the 15 real-life case studies included in the Guide as you begin your year-end valuation assessment.

Read More

Topics: investments, Private Equity & Venture Capital, PE/VC, portfolio companies, portfolio companies investment

'GILTI' Regulations: What it Could Mean for Private Equity and Venture Capital Firms
Posted by Barret Pinto on Oct 1, 2018 5:13:50 PM

On Sept. 13, 2018, the Treasury and IRS released proposed regulations related to the enactment of the tax on global intangible low-taxed income (“GILTI”). GILTI was included as part of the 2017 tax reform law introduced as the Tax Cuts and Jobs Act (TCJA). The proposed regulations address several areas, including computational, definitional and anti-avoidance rules for GILTI. The guidance includes provisions applicable to partnerships as well as consolidated groups, but leaves open many questions related to look-through treatment for foreign tax credits, and the interaction with other newly enacted code sections.

Read More

Topics: Private Equity & Venture Capital, PE/VC, portfolio companies, GILTI, global intangible low-taxed income

Tax Implications of the New Rev Rec Standard for Portfolio Companies
Posted by Claudia Mullen on Sep 14, 2018 3:56:49 PM

Companies generally must use the same method of accounting to recognize revenue for tax accounting as they do for financial reporting, unless the financial reporting method is inconsistent with tax regulations or guidance. This can create scenarios where private equity and venture capital groups and their portfolio companies may have different methods of accounting for tax and financial reporting purposes. The adoption of the new revenue recognition standard under ASC Topic 606 can introduce additional complexities, as tax accounting methods do not automatically conform to the new financial reporting standard. Instead, taxpayers must request IRS consent using Form 3115 to change their tax method of accounting for revenue recognition. The differences between accounting for tax and financial reporting may result in portfolio companies recognizing revenue for income tax purposes earlier than under previous guidance.

Read More

Topics: Revenue Recognition Standard, Revenue recognition, Private Equity & Venture Capital, PE/VC, portfolio companies, rev rec

Popular Posts