Braddon Group

Today, the world celebrates International Women’s Day. Though the day’s theme was recognized as early as 1909, it wasn’t until 1977 that the United Nations General Assembly asked member countries to proclaim March 8 of every year as the official day to celebrate women around the world. This year the UN theme is, “Women in the Changing World of Work: Planet 50-50 by 2030.”

That “50-50” is packed with advantages. In 2015, a McKinsey Global Institute report concluded that $12 trillion could be added to the global gross domestic product if countries work to bridge gaps between men and women in the work world—and that’s just if all countries were to perform as well in making strides as the most progressive countries in their regions. In a best-case scenario, in which women and men achieve true parity in the work place internationally, the potential rises to $28 trillion. With this kind of upside, it’s plain to see why leaders around the world have a keen interest in advancing women in the workplace, and driving for greater workplace equality.

This year’s theme is of particular interest in the accounting profession. Women have played a critical role in the changes occurring in the profession. With that in mind, we solicited comments from women in the profession. They are meant to inspire and motivate women to enter accounting; but even if you are already in the profession, you might take inspiration from some of these words of wisdom.

Barbara DeBaere Poppy, CPA: “If you like organizing and keeping order, making decisions with facts and hard evidence, and helping others, you will never be unemployed a day in your life with an accounting career.”

Elizabeth J. Moffett, CPA: “There are NO limits for women in public accounting. And this career is very suitable for women at all stages of their lives, giving them the ability to balance their life plans with professional careers. It is also appropriate for women who are late starters to this career.”

Annette Nellen, CPA, CGMA, Esq. and chair of the AICPA Tax Executive Committee: “Be bold for pursuing a career in tax accounting! The tax field is a great place for wise, critical thinkers, whom are attentive to detail, able to explain complex concepts, and willing to take leadership roles to help improve the tax system and help emerging accountants enter and succeed in the field.”

Annmarie Maynard CPA, CGMA: “Women need to support women. It’s a tough world out there for women to get ahead, and clawing your way to the top over other women is only playing the short game. Find one woman who you can mentor and pay it forward. Because some day that woman… may be your daughter.”

Alana Best, Macc: “Go after your goal with everything you have, be tenacious and driven. Start the degree and keep at it until you are done. It took me 20 years to complete my MAcc because life got in the way, I finished it in September and that felt amazing!

Most of all, believe in your abilities and surround yourself with others who support your goals. I am finally a CPA Candidate and if that’s what you want, you will get there too! Good luck! Just keep moving forward!”

Holly Kelley, CPA: “I have enjoyed amazing flexibility in my accounting career that has allowed me to be part time while my children were young and then reenter the work force full time at a position above where I left off.”

Cari Weston, CPA, CGMA and the Association of International Certified Professional Accountants Director, Tax Practice and Ethics-Public Accounting: “Accounting is a broad field filled with opportunity. It suits every personality, every talent set and every person who has the curiosity, intellect and drive required of today’s accountants. For women, the advantages are clear: innumerable opportunities for learning and advancement, excellent salary prospects, and the lure of a range of specializations that cater to your particular skillset. The time has never been better to be a woman in the accounting profession!”

Melody Thornton, CPA: “The great thing about being a CPA is that there isn’t just one path. There are great benefits and opportunities for those who start with the Big 4. There are equal but different, incredible opportunities for those who don’t go with the Big 4. You can go anywhere and do anything better when you start with a CPA. Plus, it allows flexibility because many of the career paths allow you to work odd hours.”

The AICPA heartily supports workplace diversity and inclusion. Women’s issues are addressed through our Women’s Initiatives Executive Committee (WIEC), whose mission it is to educate, advocate for and advance women in the accounting profession.

Group of women image courtesy of Shutterstock.

 

     

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“Today only happens once in a lifetime. Make the most of it.”

-Michael Ray, Country Music Singer

It’s hard to believe that it’s been seven months since I blogged about tax reform; I guess I was distracted by IRS service issues. But here we are again and it looks like the stars are aligning for a once-in-a-lifetime opportunity for tax reform. Or in my case, a twice-in-a-lifetime opportunity.  I was around in 1986 for that monumental tax act and 15,000 changes later, here we are again.  Our legislative process is part of the price we pay for democracy and that isn’t all bad.

(Chess and the legislative process have a lot in common, hence the reference to Knight to H3, the dangerous but noble move Ron Weasley makes to achieve checkmate in the movie, Harry Potter and the Sorcerer’s Stone.)

Magic, however, is not one of the optional responses to the test I’ve given in my tax reform blogs:  “What will be the greatest driver of tax reform?”

Here are some possible answers:

• Bipartisan compromise
• Congressional leadership changes
• Current events
• Revenues
• Good tax policy

Donald Trump winning the White House wasn’t one of the choices either but seems to be part of the answer with the Administration, the Senate and the House all Republican-led. The current iteration of tax reform discussions has lasted for about six years. Last June, the House Republican Leadership released A Better Way, its blueprint for reform. To be sure, there are no current bills or legislative language. Quite the opposite, details are missing. But with Republican control, tax reform may be just over the horizon.

As an aside, and speaking of good tax policy, the AICPA recently updated its Guiding Principles of Good Tax Policy: A Framework for Evaluating Tax Proposals. The 12 guiding principles offer criteria for developing and improving tax laws in directions that the AICPA believes are in the public interest.

The political environment changes almost daily; however, here is the timing as we know it today. ACA repeal and replacement has been the first order of business. House Speaker Paul Ryan has indicated that he’d like to see a tax reform bill released publically by the end of April or early May and pass the House before Congress takes its traditional August recess.

A separate Senate process will take time and likely involve budget reconciliation. The possible result is the bill could be passed earlier but it just couldn’t go into effect until the government’s next fiscal year, which begins October 1, 2017.

Despite the extreme level of partisanship in Washington, there is still bipartisan interest in tax reform.  Notwithstanding that interest, crossing the finish line to signed legislation will not be easy due to several challenges:

• Creating a revenue-neutral bill will be difficult. A focal point driving the current discussions of tax reform is lower individual and business rates. Broadening the base – read that to mean eliminating deductions – to make up for these low rates will be a challenge. The changes will be fundamental and uncomfortable for many – some will win and some will lose. 

• Managing ACA repeal/replacement overlaps tax reform. A key priority for the Republican leadership and the Administration, repealing and replacing the Affordable Care Act is proving to be more of a challenge to implement and seems to be contributing to a delay in taking up tax reform. However, the timing for taking on ACA could very well slide.

• Using regular order or budget reconciliation is an important consideration. Using the reconciliation process makes it easier to pass a bill in the Senate as only a simple majority of votes is needed but there’s a catch:  it can only be used once a year and leaders plan to use it for ACA repeal. That leaves tax reform needing 60 Senate votes to pass if ACA action occurs first. As I alluded to earlier, the other option would be to consider reconciliation – that scenario is a bit murky, they may still be able to vote on tax reform legislation, but delay the date the bill goes into effect to comply with the once-a-year restriction.

• Possible Senate resistance to a House bill. Senate Finance Committee Chairman Orrin Hatch (R-Utah) has raised concerns with aspects of the House Republican Blueprint and has indicated that the Senate may not just take up and pass a House tax reform bill. Specifically, Hatch has questioned the Blueprint’s border adjustability proposal, calling it a “significant shift” in business tax policy.

So, to sum things up, there’s still a very good chance for major tax reform happening twice in my lifetime but it’s looking like the timing is sliding to the latter part of the year. It’s a huge undertaking.

Michael Ray also said, “People have enough ideas. The real question is ‘Which ideas are you going to use?’” Sometimes the AICPA likes the ideas and sometimes not. For example, we strongly oppose restrictions on using the cash method of accounting.

Learn what ideas are being proposed on the AICPA’s Tax Reform Resource Center, how they affect you and how we are speaking up on behalf of the profession.

Edward Karl, CPA, Vice President – Taxation, American Institute of CPAs. 

Chess image courtesy of Shutterstock.

     

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The face of America is showing its age: According to the National Institute on Aging, the number of Americans age 65 and older is expected to double in the next 25 years, with those 85 and older constituting the fastest-growing segment of the U.S. population. These Americans are increasingly becoming targets for elder financial abuse.

Extent of the Problem

The phenomenon of elder financial abuse is not new. But today, increasingly sophisticated tactics are being used with significantly higher stakes. Assets totaling approximately $23 trillion are the target.

The National Adult Protective Services Association (NAPSA) reports that the rate of elder financial abuse is extremely high, affecting 1 in 20 older adults. However, at the same time, only 1 in 44 cases of elder financial abuse is reported. The greatest number of reported abuses were perpetuated by family or others known to the victim.

Who Takes Advantage of Seniors and Why?

Abusers may be friends, acquaintances, total strangers, professional con artists, paid caregivers or even a family member.

According to NAPSA, the following factors contribute to the prevalence of senior financial abuse:

• A high percentage of seniors live alone and may be more vulnerable to scams.
• Age 60 is the optimal age for financial decision making, and the ability to make financial decisions declines from that point on. In contrast, a senior’s perception of their financial decision-making abilities does not decline. This widening gap creates an opportunity for abusers to exploit.
• Seniors can be very trusting, and may have trouble spotting fraud.
• Seniors on average have a net worth substantially higher than younger consumers.
• The population of seniors is increasing rapidly, providing a tempting target for abusers. The fastest-growing demographic cohort in the country is single women age 85 and older.

A critical step in helping older clients is to look at ways to help them avoid abuse in the first place.

Avoiding Abuse: Prevention

Our second post in this blog series discussed indicators that should raise red flags, and steps that CPAs can take to safeguard client assets. However, abusers of all stripes are always coming up with new scams.

It’s important to become educated about the growing variety of scams and methods used by abusers, and impart this knowledge to your clients. Look for signs that might indicate abuse: Does your elderly client have a new boyfriend? Does her son insist on sitting in meetings and seem overly interested in her finances? Is money inexplicably disappearing from her bank account? Did she just sign over Power of Attorney to her neighbor?

There are several steps to take to help protect your client proactively:

• Educate 1040 clients that you can do much more than compliance. Develop 1040 clients into clients for whom you provide bookkeeping and elder consulting services. Recognize opportunities to protect the aging client.
• Keep the lines of communication open with your clients and their family members.
• Arrange for more than one family member to receive bank statements, brokerage reports and other financial reporting documents.
• Consider setting limits on check amounts and account charges.
• Set up notifications for activities that affect credit, including credit application filings.
• Help build a safety net or team and incorporate a care manager. A collaborative effort including all of a client’s advisers: CPA, attorney, insurance consultant, trust officer, etc. will provide more protection. Coordinate with the client’s estate planning attorney as safeguards can be built into legal documents as well (e.g., co-agents, co-trustees, a monitor or trust protector).
• Establish a revocable trust and have a trust protector named who is not the trustee.
• Help your clients understand that a Power of Attorney is insufficient to protect them from abuse, and that they should plan more broadly by having an independent person (i.e., independent of the person serving as agent under the power of attorney) receive financial documents. Have yourself as the CPA named as that independent person.
• Take concrete steps before your client exhibits signs of decreasing cognitive ability.

The National Council on Aging offers a variety of consumer resources that you can share with clients to educate them about scams and fraud.

Taking Action

CPAs are in an exceptional position to protect their clients from elder financial abuse. As a trusted advisor, you have a broad overview of your client’s finances. If you suspect any type of elder abuse, report it immediately. Mandatory reporting requirements vary by state. For example, care managers are mandated reporters and must report any suspected abuse. According to the Department of the Treasury Financial Crimes Enforcement Network, elder abuse, including financial exploitation, is generally reported and investigated at the local level. Adult Protective Services, District Attorney’s offices, sheriff’s offices and police departments play key roles in these cases.

Along with a growing number of seniors in the United States, there comes increasing business opportunities for CPAs to specialize in this segment of the population. Adding services such as bill paying, tax preparation and long-term-care planning can help CPAs better serve their senior clients. The AICPA has numerous resources that can assist with elder financial planning and help you determine whether focusing on these services is right for you and your practice.  In addition, you can learn more in the AICPA Forensic and Valuation Services report on fraud trends and topics.

Martin Shenkman, CPA, MBA, PFS, AEP, JD, Shenkman Law. Martin is the founder of Shenkman Law, where he focuses on estate and tax planning. He is the author of more than 42 books and 1,000 articles, and is a quoted expert on tax matters. His work appears in well-known publications, including The Wall Street Journal and The New York Times. Martin is also known for his active charitable work, which has been profiled in Forbes. See his blog post at www.shenkmanlaw.com.

James Sullivan, CPA/PFS, MedicareAware. Jim has been a personal financial planner for almost 30 years. His practice focuses on clients who are chronically ill and their families. He has written several books including one on Medicare for the AICPA and over 70 articles on planning and paying for health care in retirement. He can be reached at jim@medicareaware.com.

Randal Wolverton, CFE, CPA, CFF. Randal is a retired FBI Special agent, after 28 years of services. He has developed and provided training relating to fraud detection, investigation and prevention to numerous law enforcement agencies, college undergraduate and graduate programs, auditors, accountants in private practice and other professional organizations. Randal is past chairman of the AICPA Fraud Task Force, and currently provides forensic accounting services as a Sole Practitioner.

Senior woman on phone image courtesy of Shutterstock.

     

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When you hear the word measurement, what comes to mind? For most of us, measurement implies an exact science. However, there are situations, especially in the financial sector and broader business community, where measurement is not so easily defined or performed. And one of those situations is fair value measurement.

What makes fair value measurement such a challenge is that, unlike real property and other tangible assets (which can be objectively measured and valued), there’s tremendous subjectivity and diversity within the available and applicable valuation resources, guidance and methodologies. This diversity often manifests itself in inconsistent application and documentation which, in turn, can result in valuation deficiencies.[1] The reaction to these valuation deficiencies can be seen in heightened regulatory scrutiny and diminished investor confidence.

As regulators and investors continue to push for greater transparency in financial markets, both domestically and internationally, financial statement disclosures that rely on professional judgment generally – and fair value measurement specifically – will continue to receive scrutiny.

Valuation professionals who avoid certain deficiencies will produce more supportable, consistent and well-documented valuations. As a result, clients and auditors will have a clear understanding of how the valuations were determined, thus increasing overall trust in the valuation professional.

Here are three common deficiencies that should be avoided:

1. Insufficient documentation for professional judgment. Assumptions used to determine the fair value of a product or service are often not well supported by the valuation professional. Inputs based on professional judgment that are qualitative in nature are present in every valuation engagement. However, if they’re not properly documented, the users of the valuation report (e.g. client, auditors) are left to guess what the valuation professional was thinking. Well-documented qualitative inputs provide a clear path from the thought-process to the results disclosed in the valuation report.

2. Insufficient documentation of fair value conclusion. It’s common for valuation professionals to use multiple methods when determining fair value. In situations where multiple methods are used, it’s important to thoroughly document how each method contributed to the final conclusion of value. However, what’s not appropriate is to simply take an average of the results without providing a rationale for doing so. How the results of each method are weighted and integrated into the final conclusion of value relies heavily on the professional judgment of the valuation professional. Therefore, adequate documentation of the work is crucial to support the conclusion of value properly.

3. Lack of professional skepticism when reviewing management’s prospective financial information (PFI). A company’s PFI might be prepared routinely by one or more members of management or, in larger companies, an internal functional group often called “financial planning and analysis” (subsequently referenced as ‘management’). Valuation professionals must understand and document how the PFI was developed by management. It’s important to be aware of the purpose for which the PFI was prepared and understand whether the PFI was developed using market participant assumptions. Part of the valuation professional’s responsibility is to evaluate the PFI provided by management for reasonableness in general, as well as in specific areas.

Factors and common procedures to consider when preparing an assessment of a company’s PFI may include, but are not limited to:

• Comparison of prior forecasts to actual results
• Comparison of PFI to industry expectations
• Check PFI against other internally prepared financial information for consistency
• Comparison of entity PFI to historical trends
• Understand who prepares the PFI and how often is it prepared
• Perform mathematical and logic check

Fair value measurement deficiencies present challenges not only for valuation professionals, but also for their clients, investors and regulators, as well as others who are placing their trust in a company’s financial statement. With more consistency and transparency in the valuation process, and a dedicated focus on the qualifications and oversight of valuation professionals, fair value measurements can effectively meet the needs and expectations of the global marketplace and those who contribute to its ongoing evolution.

The AICPA recently introduced a new credential – the Certified in Entity and Intangible Valuations (CEIV) credential – which aims to add more transparency to the valuation of entities and intangible assets. Learn more about the CEIV credential and how credential holders can reduce deficiencies in fair value measurements by following the performance framework.

[1] The term ‘deficiencies’ is used broadly here to define errors or omissions in a valuation professional’s report or supporting work documents; however, readers should understand that this also is a technical term used in the audit profession as well, where it has a different meaning.

Mark O. Smith, JD, CPA, Lead Technical Manager – Forensic and Valuation Services, Public Accounting, Association of International Certified Professional Accountants.

Tape measure image courtesy of Shutterstock.

     

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Some of history’s best stories are the ones we haven’t heard.

Until the Oscar-nominated film “Hidden Figures” premiered, few people knew a group of pioneering African-American female mathematicians helped propel the U.S. forward in the Space Race.

Thanks to the prominence of the movie, these trailblazing women are finally earning recognition. “The true story also demonstrates the crucial value of diversity in the workplace,” says Kim Drumgo, Director of Diversity and Inclusion at the AICPA.

“A diverse workforce exposes employees to the value of different perspectives and experiences,” Drumgo adds. “It fosters innovation and a growth mindset.”

As the U.S. and the AICPA celebrate Black History Month, Drumgo shares three lessons we can learn from “Hidden Figures”.

1. Strive for inclusion

“Every member of an organization is responsible for creating an inclusive workplace,” Drumgo says. “Research has shown our natural tendencies may be to gravitate to and be more trusting of people like ourselves.” So, creating an inclusive workplace may take purposeful effort, such as fostering a work culture that prioritizes collaboration.

In the movie, astronaut John Glenn demonstrates the power of inclusion when he greets staffers working on calculations for his mission. Although he’s directed to shake hands with only white staffers, he greets the entire receiving line. Glenn’s understanding of the importance of the inclusion of all talent was needed to make the mission to space possible.

“Glenn looked past what society told him and focused on the value that each individual would bring to the mission,” Drumgo adds. “He not only challenged social norms, but his small gesture of inclusion created trust between him and the women.”

“I believe we can solve the shortage of talent by looking beneath the surface of the assumptions, bias and stereotypes we have for others and ourselves, says Drumgo.

2. Challenge ‘groupthink’

Sometimes, poor business decisions or policy missteps within an organization can be the result of ‘groupthink,’ a phenomenon that occurs when people conform to common thinking, such as stereotypes, or simply do things the way they’ve always been done to avoid conflict.

“In most cases, there is at least one person who clearly sees the dysfunction of groupthink and has enough courage to challenge it,” adds Drumgo.

In “Hidden Figures”, mathematician Katherine Johnson confronts one such situation when she’s denied access to a staff briefing that has never been open to women.

A supervisor explains his reasoning by saying, “There is no protocol for women attending the weekly debrief.” Katherine’s response: “There is no protocol for men circling the earth either, sir.” And just like that, the chain of groupthink was broken.

3. Grow your career by growing others

“The women depicted in the movie recognized the value they offered not just to NASA, but in leading the way for women and generations to come,” Drumgo says.

In a key scene, Dorothy Vaughn, the unofficial supervisor to 20 African-American women at NASA, was offered a promotion. She wouldn’t accept the move unless she could take the other women with her. This proved to be a career-enhancing opportunity for Vaughn. “We all get to peak together or we don’t peak at all,” said Vaughn.

“Mentoring is the greatest way to grow the talent you are leading and the greatest way for mentors to grow as leaders as well,” Drumgo says. There are a variety of free resources available, such as the AICPA’s upcoming webinar—How to Effectively Coach, Mentor and Sponsor Diverse Talent—to help leaders and organizations form successful engagement programs to fully maximize their talented staff.

These are just a few of many lessons that can be gleaned from this Oscar-nominated and widely celebrated film. There are lessons about stereotypes, unconscious bias and fostering an inclusive workplace, all which have significant effects on how the world does business. If you have not seen the movie, take some time to do so. Who knows what other lessons you may discover?

For more information on the AICPA’s diversity and inclusion initiative in addition to a variety of tools and resources, please visit aicpa.org/diversity.

Click here to register for the free webinar—How to Effectively Coach, Mentor and Sponsor Diverse Talent.

Samiha Khanna, writer, editor and media relations adviser.

“Hidden Figures” image courtesy of Shutterstock.

     

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Are you wondering if all of your clients should complete the Free Application for Federal Student Aid (FAFSA) for their college-aged children even if they don’t anticipate qualifying for any federal aid?

Consider the following scenario: A successful couple own and operate a business and have two children in college. At 58 years old, the husband suddenly and unexpectedly passes away from a heart attack, rocking the family and ending the business.

The family, however, had faithfully completed the FAFSA annually for their children, although they had never previously qualified for financial aid. Within one week of the death of the father, both universities contacted the children with financial aid packages that allowed them to stay in school.

Would these universities have responded similarly had the families not filed the FAFSA? Perhaps. However, it would presumably have been a much longer and more difficult process to gather financial information in the midst of such a crisis.

This is not a far-fetched scenario. In fact, I encountered this exact set of circumstances with a client, and the speed at which the universities responded underscored how important it is to ensure all clients complete the FAFSA for their children.

Still not convinced? Let’s look at a few of the reasons you should be encouraging and assisting your clients in this process, and review some planning opportunities to enhance their financial aid eligibility.

Regardless of your clients’ income or assets, if they have children attending college, they should complete the FAFSA.

1. In order to qualify for any federal aid or financing, including non-need based loans, students must complete a FAFSA. Additionally, many colleges use the FAFSA for their own scholarships and aid, even merit or non-need based options.
2. Circumstances change. College is generally a four-year endeavor, and a lot can happen in that time. If your clients experience a death in the family or a loss of income, having filed FAFSAs in the past will make it easier for the family and college to react.
3. Many colleges mine these forms for data on students and their finances – including whether the student fits the profile of what the school is looking for.

Planning Opportunities to Enhance Aid Eligibility

CPAs can offer tremendous value to clients who complete the FAFSA, and it’s critical to start planning early. In a change effective for the 2017-18 school year, families can begin filing the FAFSA on October 1, 2016 using their 2015 tax information, which means the base year for purposes of computing the expected family contribution (EFC) is two years prior.

1. Start with income. Assets are assessed at 5.6% when computing the estimated family contribution (EFC), however, 47% of parents’ assessable income is available for college costs. Deferring income such as bonuses, capital gains, and distributions is a logical place to start your planning. For example, a client with a C Corporation can drop his or her salary or have the C Corp make larger contributions to the retirement account. Don’t neglect planning for untaxed benefits; the FAFSA requires that you add back certain income items including employee retirement account contributions, child support, and untaxed interest.

2. Relocate assets. Retirement assets and home equity are not assessed for purposes of computing the EFC, so clients can proactively shift assessable assets by making contributions to retirement plans before the base year, or by paying down their mortgage. When considering retirement contributions, plan early! If these contributions are made in the base year, they will be added back as untaxed benefits on the FAFSA. However, for future years, they will not be assessed again. Additionally, using cash to make large purchases in the base year or pay down consumer debt can also be considered to reduce cash on hand.

For more planning ideas and customizable client articles on education planning, the AICPA’s Personal Financial Planning Section members have access to content from Broadridge Advisor Solutions, including “Positioning Your Income/Assets to Enhance Financial Aid Eligibility.” If you are a CPA offering advice to individuals, be sure to use resources from the PFP Section to help you as you provide estate, tax, retirement, risk management, education and investment advice.

Gary E. Carpenter, CPA, CCA, Executive Director, National College Advocacy Group. Based in New York, Mr. Carpenter has over thirty years of experience in tax and financial planning and has spent the past seventeen years in college planning and consulting. He is a CPA and Certified College Advocate (CCA), the co-founder and Executive Director of the National College Advocacy Group, and an active committee member for the New York State Society of CPAs.

FAFSA application image courtesy of Shutterstock.

     

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Disruption in the marketplace, changes to regulations, tax reform, technology advances and globalization make developing professional competencies more important than ever for CPAs. According to a recent Harvard Business Review article, “continuous and persistent learning isn’t merely a decision. It must become a habit. And as such, it requires careful cultivation.”

Ongoing skill development is critical for maintaining your professional relevance. You need to dedicate time to continue your competency development. But where do you start, and how do you fit it in to your schedule? Digital learning activities provide opportunities to incorporate learning into your daily life and offer flexibility that a traditional classroom can’t. Here are five digital learning activities to try:

1. Social media

Leveraging social media to gain insights from thought leaders and peers around the globe is an easy way to incorporate digital learning into your development plan. Obtain valuable resource tips, find articles and discover infographics on LinkedIn. Exchange professional opinions in discussion forums pertaining to emerging industry trends and get peer input on your unique business challenges through your social channels. These guides from the AICPA can help you get started with best practices.

2. Podcasts

Podcasts provide you with an opportunity for hands-free learning. Listen to podcasts from industry leaders, authors, and keynote speakers while exercising or commuting. You can stimulate your mind while improving your body physically and utilize your commute time for your professional development.

3. Immersive online courses

A new and exciting trend in the evolution of online learning is the integration of 3D avatars and augmented reality. Real-world scenarios provide a powerful context for learning technical information, and interactive media with engaging graphics heighten the overall learning experience.

4. Resources from professional associations

Take advantage of online resources that typically come with most professional association memberships. Many membership packages, including the AICPA’s and your state CPA society’s, come with an online login to access digital toolkits, interactive e-books, videos from thought leaders and downloadable templates. You can find opportunities to obtain valuable insights, helpful resources and exposure to industry experts and stay up-to-date on the latest developments, enabling you to get the most out of your membership investment.

5. Online conferences

Conserve two of your most precious resources, time and money, while accessing all the conference content when you attend virtually. Online conferences help you save on travel expenses and time by offering live streaming so that you can participate via desktop or mobile from your office or home. These experiences are enhanced by a number of features that are unique to the online experience, including live chat, interactive polling, immediate downloads of presentations and session note-taking features that automatically email your notes to you after a session.

All of these digital learning activities provide convenience and flexibility while helping you build your competency so that you can stay up-to-date with your learning and sharpen your skills. I encourage you to include them in your development plan and to make time each week for your continued growth.  

AICPA ENGAGE features six conferences in one online event June 12-15, 2017. Online attendees can earn up to 35 hours of CPE. Learn more about the online experience here.

Michael McKenzie Grant, MFA, Director – Learning Design and Development, Association of International Certified Professional Accountants.

Woman studying image courtesy of Shutterstock.

      

If you’re one of the 111 million people who watched the New England Patriots power their way out of defeat at the Super Bowl, did you think it was just about over in the third quarter when the Atlanta Falcons were leading 28-3? I admit, I did. Even paid my tab and headed home. We were in for a surprise as the Patriots (led by quarterback Tom Brady) charged ahead and turned the game around to win 34-28.

As a perennial backer of the underdog, I was rooting hard for the Falcons but that doesn’t lessen my respect for a team that resisted falling into a “it’s a lost cause, let’s just get this over with” mentality. Let’s face it, we’ve all been at that point: whether it’s a career challenge, relationship or financial difficulty, or perhaps a health problem, some hurdles seem impossible.

Of course, part of the challenge is knowing what’s truly beyond reach and what isn’t. Becoming a rock singer is out of the question for me unless every rock fan loses their hearing. But many goals are attainable; watching a few of the movies listed below may help reinforce that fact. These films, which include suggestions from AICPA colleagues, depict mental toughness in facing huge hurdles. While Hollywood does embellish, these feel real for the most part and many are based on real people and events.

1. Erin Brokovich (2000) – Based on the real story of an unemployed mother who gets a job as a legal assistant and takes on “Goliath” (a large utility) in her investigation of groundwater pollution that is harming the townspeople nearby.
2. Hello, My Name is Doris (2015) – A shy, unassuming 60-something woman gets inspired by a self-help seminar to pursue a crush on a much younger colleague, shaking up her sheltered and routine life in the process.
3. Hidden Figures (2017) – The inspiring true story of three African-American female mathematicians who, despite the substantial gender and race barriers of the time, played a key role in the United States’ historic launch into space.
4. I Know Why the Caged Bird Sings (1979) – This film traces author Maya Angelou’s life  growing up as a young black girl in the South during the Depression, and how she overcame a traumatic childhood to discover her true worth.
5. Joy (2015) – The title character of this movie is a divorced mother of two coping with parents and an ex-husband who lean on her heavily. An inventor at heart, Joy creates a self-wringing mop and faces a lot of hurdles on a journey to make her invention a success.
6. Miracle (2004) – Kurt Russell plays real-life coach Herb Brooks, who took the U.S. men’s hockey team to the 1980 Olympics to challenge the legendary Soviet Union team.
7. Pursuit of Happyness (2006) – Broke, homeless and responsible for his young son, Chris Gardner refuses to give up on his dream to be a stockbroker (based on the book by the real Chris Gardner).
8. Rudy (1993) – Being far smaller than any football player doesn’t prevent this determined kid from pursuing his goal of playing for the Notre Dame College football team.
9. Secretariat (2010) – The first horse to win the Triple Crown in 25 years, Secretariat became a legend for his speed and size, but it took the persistence of co-owner Penny Chenery to stay in the race.
10. Vision Quest (1985) – High school wrestler Louden Swain has to lose 23 pounds to challenge the state champion whom he is determined to beat. With little support from his coach or father, can he do it, especially when a romantic interest shows up?

But what about…?

Some of you may be protesting the absence of Rocky, The Blind Side, etc. They are excellent movies – there just wasn’t room for all of them and I wanted to include some that folks may have either forgotten or didn’t know about and, for those who mainly watch the Super Bowl for the commercials, some without a sports theme. Ray, Philadelphia and Lorenzo’s Oil are a few more I would recommend to celebrate the human spirit.  Please feel free to add here to our list – we’d love to hear what movie has inspired you the most.

Ann Marie Maloney, Communications Manager – Tax and Personal Financial Planning, Public Accounting, Association of International Certified Professional Accountants.

Illustration courtesy of Shutterstock.

     

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With a rapidly aging population, more people will turn to their CPA in the coming years as a trusted source of guidance, especially when making senior living decisions. A popular, but also rather complex choice is the continuing care retirement community (CCRC or “life plan community”). 

By combining independent living with a continuum of care, CCRCs offer a viable solution for older adults who are healthy today but seek the peace of mind of having care services readily available in the future. Your client’s specific needs will likely determine which CCRC is best for them. There is no “one size fits all” approach here. Yet, due to the financially significant nature of the CCRC decision, it is important to make sure their first choice is the right choice, so you owe it to them to be well-educated and informed on this topic.

Contract Details

In its truest form a CCRC provides lifetime housing and priority access to care services, including assisted living, memory care, and/or skilled nursing. However, the contract language can vary significantly from one CCRC to another, particularly as it relates to pricing.

Most CCRCs require an entry fee in addition to monthly fees, which help fund the breadth of services offered, including healthcare. With entry fees, almost all are refundable in some capacity. With declining-balance models, some portion of the entry fee will be available if your client moves out, or passes away, during the first few months or years. The amount refundable declines each month until no refund remains. Under return-of-capital models, your client will pay a higher entry fee but will get some portion of the entry fee back, no matter how long they live in the community.

Refunds typically range from 50 – 90%. The difference between what your clients will pay while living independently versus what they will pay when they need care depends on the type of contract.  Some contracts, known as lifecare, stipulate that the monthly fee will remain level, except for inflationary increases, regardless of how much care is received. Other contracts, typically referred to as fee-for-service, require lower monthly fees while living independently, but, when needed, care services will be billed at the market rate, which may amount to an increase of several thousand dollars per month. There are also contracts that represent a hybrid of these two choices.

While it is important to review the entire contract, a few other details you’ll want to pay careful attention to are: the potential additional costs beyond the published rates, stipulations for receiving refundable portions of the entry fee (when applicable), and what happens if your client exhausts their assets on healthcare.

Financial Stability of CCRC

The financial stability of a CCRC will, in large part, determine whether it can fulfill its long-term commitment to residents. Being well-versed in senior living can help you help your clients analyze a CCRC’s financial ratios relating to reserves, profitability, and debt. A few other things to consider are whether occupancy is at or above 90 percent, if an experienced management team with up-to-date marketing and strategic plans runs the facility, and if a recent actuarial study has been performed by an independent actuary. 

Lifestyle

Location, culture, programs and other services and amenities should align with your client’s personal preferences. Ultimately, it’s most important to consider whether the lifestyle offered will help your client thrive in mind, body and spirit.

It may be wise for your client to stay a night or two in a guest suite to get a sense of what it might be like to live there. They can observe whether residents seem involved in the community and respected by staff.  Are activities mainly resident-driven or staff-driven? This can indicate the vitality of the resident base, or lack thereof. Is there up-to-date technology, including wi-fi in common areas and in the residences? Also, are meals only available at scheduled times, or are there flexible meal times and menus? Answering these questions will help your clients identify the best fit.

Healthcare

Since the availability of healthcare services is one of the main reasons for choosing a CCRC, your clients should do the proper due diligence to be sure high-quality care is provided. For CCRCs with a Medicare-Certified healthcare center, the first place to start is to look up their CMS rating on the Medicare website under “Nursing Home Compare.” This includes things such as quality measures, safety inspection outcomes, staff ratios and more. Other steps include asking whether the healthcare facility has received any special awards or recognitions recently, and checking with the regional long term care ombudsman to find out if there is a record of complaints.

As a CPA, you will continue to be a resource to your clients as they age. It is important to help them carefully weigh and think through the critical and life-changing process of selecting a CCRC. It is a complex and potentially confusing decision to make, and helping them through this time will demonstrate your incalculable value. For more information on helping clients with elder planning and elder issues, visit the AICPA PFP section Elder Planning resource page.

Brad Breeding, CFP®, president and co-founder of MyLifeSite.net, an online senior living research and forecasting tool. He is a nationally recognized expert speaker on retirement planning and the senior living industry. Brad previously spent 14 years as a personal financial adviser, focusing on sound planning for retirees. He has authored several books on issues related to senior living, including his most recent, “What’s the Deal with Retirement Communities?,” available Spring 2017 on Amazon.com.

Caretaker image courtesy of Shutterstock.

     

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