Thursday, July 19, 2018

Changes in Not-for-Profit Organization Financial Statement Presentation

In August of 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-14.  This ASU changes the financial statement presentation for not-for-profit organizations effective for fiscal years beginning after December 15, 2017.  The main areas of changes are outlined below.

Net Assets – These are to be reflected as either with donor restrictions or without donor restrictions, rather than the former presentation of unrestricted, temporarily restricted or permanently restricted.  Information pertaining to board designated net assets is now mandatory rather than optional.

Endowments – The presentation of underwater endowments is reflected in net assets with donor restrictions and bear additional disclosure requirements.

Investments – Investment income is no longer required to be broken down by components, and expenses are no longer required to be disclosed.  Investment return shall now be reported net of external and direct internal investment expense.

Asset Liquidity – Not-for-Profit organizations are now required to disclose qualitative information on how the entity manages its available liquid resources and the related liquidity risk.  Organizations must also disclose quantitative information that communicates the availability of current financial assets on the date of the statement of financial position.

Expenses – All not-for-profit organizations must now report expenses by function and natural classification and disclose the methods used to allocate costs among programs and supporting services.

There are also additional requirements pertaining to the presentation of special events and capital campaigns.

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Monday, July 9, 2018

Application for Reinstatement for Administratively Dissolved Entities in Indiana

Indiana Governor Holcomb signed Senate Enrolled Act 180 into law on March 13, 2018.  This legislation limits the amount of time that a business can file an application for reinstatement after it’s been administratively dissolved or revoked by the Indiana Secretary of State.  A business that has been administratively dissolved or revoked for five (5) years or more may not be reinstated.  The clock starts on the date of administrative dissolution or revocation.

Based on the recent change, the Indiana Secretary of State’s office will accept applications for reinstatement for businesses that have been administratively dissolved or revoked for more than five years for a brief period of time.  If your business has been administratively dissolved or revoked for more than five years, please ensure that you have submitted your application for reinstatement to the Secretary of State’s office no later than July 31, 2018.

Please be advised that it takes the Department of Revenue between 4 to 6 weeks to generate the certificate of clearance that is required as part of the application for reinstatement.  Do not delay in making this request to the Department of Revenue to ensure you meet the July 31 deadline.  This will be your final opportunity to reinstate.

For businesses that have been administratively dissolved or revoked for less than five years, you will have five years from the date of administrative dissolution or revocation to file an application for reinstatement.  For example, if the business was administratively dissolved on January 11, 2015, you must file an application for reinstatement by January 10, 2020.  If you miss the five year deadline, you will not be able to file an application for reinstatement under the new law.  You must also consider the 4 – 6 week processing time for certificate of clearance requests from the Department of Revenue.

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Information taken from

Five Tips for Smarter Banking

Banks are a necessary tool to navigate our daily financial lives. Unfortunately, there are aggravating practices at many banks that drive us crazy or cost us money. Here are five tips to get more out of your bank and pay less.

Tip #1: Remove cash from the right place. Never use an ATM machine that is not in your bank's network. In-network cash withdrawals cost nothing at most banks, but withdrawals from someone else's machine may come with a $3 to $5 fee.

Action: Turn over your ATM or debit card and note the networks on the back of the card; or ask your bank about their network coverage. Only use ATMs within the network. Test a transaction to ensure no fee is included on your statement.

Tip #2: Notify your credit card issuer when traveling. Most credit card-issuing banks now automatically freeze your cards when a suspicious transaction occurs out of state. This freeze often includes foreign website transactions.

Action: Call your credit card issuer when you are going to be traveling. Also notify them if you wish to order an item from a foreign website. This can alleviate numerous headaches. While some banks may not block out-of-state transactions, you do not want to have a transaction rejected while purchasing something on a trip.

Tip #3: Know your bank's overdraft rules. Non-sufficient funds (NSF) checks are not only embarrassing, they are expensive. Banks make millions on their overdraft fees and automatic loan features when you overdraw your account. Understand your bank's fees and how they apply to your accounts.

Action: Look for a bank that will allow you to link another account to your checking account without charging a fee. For instance, as a courtesy many credit unions allow you to link a savings account to your core checking account. This link comes into play should you inadvertently overdraw your checking account.

Tip #4: Always negotiate fees. If you are a long-standing customer with your bank or credit card company, call them to reduce or waive fees. Good examples of this are over-the-limit credit card fees or late payment fees. If you have multiple checking overdraft fees, negotiate to eliminate as many as possible.

Action: If you are late in paying your credit card or have an overdraft, fix the problem as soon as possible. Only after fixing the problem should you call to negotiate the fees. The bank customer service representative will see your quick action and will be more likely to help reduce the fees.

Tip #5: Be willing to shop. Banks understand the power of inertia. They know it's a pain to change banks. But if you are willing to do so, you might be surprised to find better alternatives for less.

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Business Disaster Recovery Plan Essentials

Irish writer Oscar Wilde advised us to "expect the unexpected." He would have made a good disaster planner. Small businesses are the most impacted because they do not usually have a formal disaster recovery plan. As a result, 40 to 60 percent of small businesses close permanently after a disaster, according to Liberty Mutual Insurance.

Don't be a part of that statistic. Now is a great time to review your business' disaster recovery plan, or to make one if you don't have one. By focusing on some of the most critical elements of a disaster plan, you can avoid being overwhelmed by the challenge.

Set your roster
The first step in your disaster plan should be to determine what skill sets you will need in a disaster, and who should be part of the team. The size of your team will vary, but could include IT, HR and operations personnel. Determine who your backups are and what outside resources and personnel you can use.

Assess your risk
You need to understand your risks before you address them. Consider your physical locations and determine the hazards unique to your region – floods, hurricanes, tornados, earthquakes, etc. Focus on the events most likely to occur, but also save some time to consider outside possibilities.

Create your plan
Determine and rank the most critical functions and processes for your business. Next, determine how these could be affected by the risks you've identified. You should end up with two lists: your most important business factors, and those most at risk. Now you are ready to create a recovery plan that focuses on critical business functions and applies them to the various types of possible business interruption. Your plan should:

·        Consider offsite backups and vendors to help assist with implementing a data storage backup plan. Assess where you store the critical information upon which each of your business functions rely.
·        Establish alternative or remote work arrangements for employees, including their physical, logistical and data needs.
·        Create an annual review of your insurance policies. Evaluate the worth of business interruption coverage within your property and casualty insurance. You may wish to offset some of the potential loss of both business income and recovery expenses within these policies.
·        Consider any opportunities for tax relief from losses sustained as a result of a disaster. Have a plan to keep detailed records and build the appropriate supplier team to help determine the best approach for your business.
·        Make sure you plan for a variety of losses. This can be loss of electricity, a fatal crash of your business systems or material damage to inventory and production capacity.

Document your plan so it is clear, accessible and easy to implement. Share it with everyone on your disaster roster so they know who is responsible for what and how they should act. Review and test your plan at least annually with your roster, and distribute any changes to keep everyone informed.
With luck, you will never need to use your business disaster recovery plan. Although we can never prevent disasters, we can do our best to reduce the impact they have on business operations.

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Personal Property Tax Notices

Now that the filing deadline for property tax returns has come and gone, the assessors are working to process the returns.  Businesses that filed an Indiana personal property tax return may receive tax notice 113/PP from their assessor.  A company that receives this notice only has forty-five days from the mailing date to respond or appeal.  Please watch for tax notices from your assessor.  

If you receive a notice, please scan or fax a copy to the attention of Stephen A. Sienicki, CPA at, FAX (219)736-4876.  Given the deadline to respond, please make sure to forward the notice received as soon as possible.  Call us at (219) 769-3616 with your questions.