New transfer pricing regulations affect retail and consumer multinationals (54kb)
April 2007
Retail and consumer companies are increasingly looking overseas to develop new markets and source products. As retail and consumer companies develop manufacturing operations, supply and distribution systems, and a retail presence in foreign markets, they also become increasingly subject to transfer pricing issues that result from cross border intercompany transactions. Transfer pricing issues emerge when tangible property is transferred or services are provided among related parties across national borders. Additionally, intangible property transfers such as the international use of brand names, trademarks, technology, and proprietary business systems can give rise to transfer pricing issues. This QuickBriefsummarizes recent changes to transfer pricing regulations that will affect retail and consumer companies in several important areas including tax compliance, financial reporting and administrative burden.
Protecting sensitive data within retail and consumer companies (66kb)
March 2007
Data protection is an increasingly critical business risk for retail & consumer companies that must be carefully measured and managed, particularly when it comes to privacy and the protection of credit card and other sensitive customer data. The growing trend toward electronic payments and the rapidly growing importance of the Internet as a sales channel has heightened the awareness of this issue, and there is pressure on retail & consumer companies to do something about it. And the pressure is coming from all sides—consumers, the media, Wall Street analysts, shareholders, business partners, and more recently, legislators. A security breach involving customer data can be devastating to a retail & consumer company, leading to a host of problems, including negative publicity, damage to reputation and loss of customer trust, fines, investigations, and litigation.
Given what is at stake and the growing risks in data protection, retail & consumer companies may need to ask themselves whether they have invested enough time, attention, and resources in data protection. This QuickBrief discusses key data protection risks, and common areas of vulnerability within retail & consumer companies as well as some practical suggestions on how retail & consumer companies can improve their companies' data protection and compliance with customer data and privacy regulations, such as the Payment Card Industry (PCI) Data Security Standard.
What we heard at the SEC conference (82kb)
February 2007
This QuickBrief highlights the recent AICPA Conference on Current SEC Developments that was held in December 2006, and provides a summary of certain matters from the conference that R&C companies may find of interest during their 2006 annual report/10-K preparation and review process and in keeping abreast of current developments.
The FASB's new pension and OPEB standard is effective for 2006 for calendar year-end public retail & consumer companies (84kb)
November 2006
In September 2006, the Financial Accounting Standards Board (FASB) issued its new pension and other postretirement benefits standard, FASB statement No. 158,
Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS 158). This standard affects all entities with defined benefit plans, including retailers and consumer products manufacturers (retail & consumer companies), by requiring them to recognize in their financial statements off-balance sheet amounts currently disclosed in the notes to the financial statements. Calendar year-end retail & consumer companies that are "public" as defined in the standard should prepare to adopt the standard for 2006 because the balance sheet and disclosure requirements are effective as of the end of 2006 for calendar year-end public companies.
This QuickBrief provides a high-level overview of the requirements of SFAS 158 to raise awareness of its broad implications to retail & consumer companies, and suggests actions companies should take to prepare for implementation.
Navigating the maze of segment reporting for retail & consumer companies (40kb)
October 2006
Financial Accounting Standards Board Statement No. 131 (SFAS 131),
Disclosures about Segments of an Enterprise and Related Information, is intended to give analysts and other financial statement users a view of the company "through the eyes of management" by looking to a company's internal management reporting structure as the basis for determining the company's external segments. Incorrect application of SFAS 131 is not just a disclosure issue; in some cases, the change in the identification of operating segments can also result in a significant change in allocation of goodwill and significant changes to goodwill impairment charges.
Therefore, the proper identification of operating segments is an important consideration for nonpublic companies as well as for public companies. In addition, the proper identification of segments continues to be an area of focus for the SEC staff, resulting in numerous restatements for companies across industries, including retailers and consumer products manufacturers (retail & consumer companies).
This QuickBrief! discusses recurring issues being challenged by the SEC related to segment reporting as well as practical points to consider when preparing financial statements and related segment disclosures.
New income tax accounting guidance regarding uncertainties affects retail & consumer companies (438kb)
September 2006
In July 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 (FIN 48)
Accounting for Uncertainty in Income Taxes that will require companies to reflect expected future tax consequences of uncertain tax positions in their financial statements. It is expected that FIN 48 will significantly affect a large number of retailers and consumer products manufacturers.
IRS takes aim at UNICAP accounting methods used by retail and consumer companies (54kb)
April 2006
Recent guidance recently issued by the IRS over the past year coupled with increased IRS exam activity may have far-reaching implications for how retailers and consumer products manufacturers (retail & consumer companies) account for their inventories in the months and years ahead. For most of the past 20 years, following passage of the 1986 tax reform legislation, the IRS has occasionally published unfavorable guidance dealing with inventory accounting methods. However, in the past year, such rulings, specifically those related to the uniform capitalization (UNICAP) rules under §263A, have appeared with increasing frequency. This QuickBrief discusses these trends and related implications of anticipated IRS scrutiny of retail & consumer companies' UNICAP calculations and methodologies, as well as related planning opportunities.
Proposed business combinations accounting standards: Impact on retail and consumer companies (97kb)
February 2006
The Financial Accounting Standards Board (FASB) issued two exposure drafts (EDs) in 2005 that propose new accounting for business combinations and noncontrolling interests. One of the EDs proposes revising FASB Statement No. 141,
Business Combinations (the proposed FAS 141(R)). The other (the Consolidations ED) proposes a new accounting standard that would incorporate consolidation guidance contained in Accounting Research Bulletin No. 51, Consolidated Financial Statements,and would provide new guidance on accounting for minority interests. Both proposals are far reaching and would affect all industries, including retail & consumer companies. This QuickBrief addresses certain provisions of proposed FAS 141(R), and to a lesser extent the Consolidations ED, that we think will be most significant to retail & consumer companies.
What we heard at the SEC conference (140kb)
January 2006
This QuickBrief highlights the recent AICPA Conference on Current SEC Developments that was held in December 2005, and provides a summary of certain matters from the Conference that R&C companies will find of interest during their 2005 annual report/10-K preparation and review process and in keeping abreast of current developments.
International financial reporting standards: Why US retail & consumer companies need to get in the game! (98kb)
June 2005
US standards are changing and will continue to change as a result of convergence. The enclosed QuickBrief! discusses the current environment surrounding IFRS and convergence, including market trends driving change, steps companies should be taking to prepare for and respond to emerging decisions, and key convergence projects affecting retail and consumer companies.
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