2011-29 also serves as an important reminder for taxpayers to review the specific provisions of their bonus plans to ensure the deduction for bonuses paid within 2% months of year end relates to a liability that was fixed and determinable
by year end.
01 Question--Entities may make investments in securities, required by generally accepted accounting principles to be accounted for at fair value, where a readily determinable
fair value for those securities does not exist.
If the benefit terms establish an obligation to pay specific amounts on fixed or determinable
dates, the cost of non-healthcare-related termination benefits should be calculated as the discounted present value of expected future benefit payments, including an assumption regarding changes in future cost levels during the periods covered by the employer's commitment to provide the benefits.
For investments that do not have a readily determinable
market value, consider other procedures, such as using a specialist engaged by the plan to value those investments (such as an appraiser for the real estate held by the plan); determining what criteria the financial institution used in valuing the investments to see if they were valued in good faith; do market comparisons of similar investments to the extent possible; and discuss these investments with the plan's investment managers or investment consultants.
While a company is forced to measure compensation under the FASB approach, at least it's fixed and determinable
at the outset.
In addition, the plan has been amended to provide that, at any time after the rights become exercisable, the board of directors may, at its option, exchange the rights for a determinable
number of shares of common stock or for substitute consideration in the form of cash, common stock or common stock equivalents, debt securities of the company or other assets in any combinations.
The Company intends to eventually wind up the insurance business that it has placed into run-off over some period of time, which is not currently determinable
Under the all-events test for income, a taxpayer recognizes income when all events have occurred that fix the right to the income and the amount of the income is determinable
with reasonable accuracy.
Life settlements, also known as senior settlements, do not involve a terminal illness (less than 24-month life expectancy) but a determinable
life expectancy based upon the insured's age, health and lifestyle.
A financial instrument issued in the form of shares that is mandatorily redeemable--that embodies an unconditional obligation requiring the issuer to redeem it by transferring its assets at a specified or determinable
date (or dates) or upon an event that is certain to occur
The amount of such compensation related to the preparation and distribution of this project is not separately determinable
A company that issues mandatorily redeemable preferred stock simultaneously incurs a contractual obligation to redeem the stock for a specified or determinable
amount on a specified or determinable
These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable
The offering price must be fixed and determinable
under the agreement;
Such transactions may lack substance and fair value may not be determinable