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October 26, 2015

Boost Your Super

The Federal Budget made dramatic changes to the superannuation rules. The overall effect will be to make super even more attractive than it already is. It is now more important for working people to take advantage of the opportunities available before June 30. The biggest change is that super payouts will be tax free for those over sixty years from July 2007 on. This includes both lump sum withdrawals and retirement income streams. Already income streams are quite tax sheltered with the earnings within the pension fund tax free. Part of the payments to the retiree are also usually tax free, the balance is taxable but with a 15 per cent tax credit attached. Now all the income will be […]

October 20, 2015

Royalties in Accounting

When a business owns a life insurance policy (BOLI) for a key officer, it pays the premiums itself and names the actual business as the beneficiary should the officer die while the policy is in place. These premiums are considered standard business expenses, with a debit to an insurance expense account and a credit to cash or a payable. There’s one additional facet of BOLI accounting to consider – the FASB has determined that the value of the policy on the financial statement date should be included as a balance sheet asset. That value refers to the cash surrender value, NOT the possible benefit paid should the officer die in the future. If the cash surrender value changes during the […]

October 12, 2015

Cloud Accounting: What You Need to Know

Accounting software shouldn’t be a chore to use Small business accounting software that’s not available via the cloud can be tedious. Traditionally, it can suck up far too much of your business’ time and effort. This doesn’t add value, and takes the fun out of being in business. Cloud software can save your company time and money. So what is this thing called the cloud? Think about when you use internet banking. Every time you access this data, you’re using the cloud. The cloud is a platform to make data and software accessible online anytime, anywhere, from any device. Your hard drive is no longer the central hub. Problems with Traditional Accounting software The data in the system isn’t up […]

September 29, 2015

Why Pay Attention to Financial Statements?

The Diversity of Financial Reporting Don’t expect financial statements to fit into a single mold. Many articles and books on financial statement analysis take a one-size-fits-all approach. The less-experienced investor is going to get lost when he or she encounters a presentation of accounts that falls outside the mainstream or so-called “typical” company. Simply remember that the diverse nature of business activities results in a diversity of financial statement presentations. This is particularly true of the balance sheet; the income and cash flow statements are less susceptible to this phenomenon. The Challenge of Understanding Financial Jargon The lack of any appreciable standardization of financial reporting terminology complicates the understanding of many financial statement account entries. This circumstance can be confusing […]