Holiday Office Hours

Happy Holidays

To celebrate this holiday season, TYS, LLP will be closed starting Friday, December 24th until Sunday, January 2, 2011. 

We will re-open on Monday, January 3, 2011.

We wish you a safe and Happy Holiday Season!

ThomasYork, LLP is now TYS, LLP

Now there's more of us to love.

We've changed our name and logo to make room for a new partner, Tim Shortsleeve.  Tim and his talented staff of accounting professionals are located in our new office in Rochester, NY. (We didn’t want to make them commute.)

Tim shares our passion for client service, and brings 20+ years of outstanding tax experience.  He also provides accounting, business consulting and coaching support services.  We know you will benefit from his knowledge and skills.

We look forward to serving you as we continue to expand the range of services and solutions TYS can offer.

Disclosure Requirements re: Multi-Employer Pension Plans

If you are a participating employer in a union collective bargaining agreement I'm sure you have been hearing about the possible changes to the financial statement disclosure requirements related to your participation in the union plans. The Financial Accounting Standards Board (FASB) has proposes some pretty onerous requirements which were originally intended to go into effect for public companies beginning with financial statements for years ending after December 15, 2010. All of our clients are non public entities so they have a one year delay on the effective date. This has been a pretty hot topic at the FASB meetings with lots of input from contractors and union representatives among other interested parties. I'm sure most of the comments were not in favor of the new requirements. The FASB met on November 10th and the September 2010 Exposure Draft on this topic was discussed. The result of the discussion is that the FASB has decided that a final standard will not be effective for the 2010 calendar year as originally planned for public companies. Revised effective dates will be decided at a future meeting after it has concluded it redeliberations. Hopefully the final requirements are not quite as onerous as originally published. We will all wait patiently I'm sure for the next Exposure Draft. For anyone wanting more information on the subject here is a link to the FASB website for this specific project. Happy reading. http://www.fasb.org/cs/ContentServer?c=FASBContent_C&pagename=FASB%2FFASBContent_C%2FProjectUpdatePage&cid=1176156724606#

AFRs for November 2010

The Applicable Federal Rates (AFRs) for the month of November are as follows:

	Annual	Semiannual	Quarterly	Monthly
Short-term (≤ 3 years)	0.35%	0.35%	0.35%	0.35%
Mid-term (> 3 years but ≤ 9 years)	1.59%	1.58%	1.58%	1.57%
Long-term (> 9 years)	3.35%	3.32%	3.31%	3.30%

What is the Difference Between a Bid, Performance and Payment Bond?

I found this on LinkedIn and thought it could be useful to help us understand the different bonds that are needed on public works contracts and some non public contracts.

What is the difference between a bid bond, a performance bond and a payment bond?

The three primary bonds that are purchased on construction projects are bid bonds, performance bonds and payment bonds. Over the years, I have spoken to contractors and owners and, in many instances, there is confusion about what each bond covers. This brief article will attempt to explain the differences. Example 1: Bid Bond ABC School District has put out a Request for Proposals for a new roof on their high school building. Contractors X, Y and Z submit bids to perform the work listed in the RFP. The School District requires each of the contractors to submit a bid bond with their bid. The bid bonds are purchased by the three contractors from sureties. The School District decides to accept Contractor Y's bid. Contractor Y determines that they have underbid the project and decides not to execute the contract and not to perform the work. In this instance, the School District can make a claim against the bid bond due to Contractor Y's failure to abide by its bid. Thus, a bid bond is a type of bond (often required on publc construction projects, but not exclusively) designed to protect the owner in the event that the bidder refuses to enter into a contract after the contract is awarded or the bidder withdraws his bid before the award. A bid bond is an indemnity bond, which will be discussed below. Example 2: Performance Bond Municipality 123 retains Contractor AB to construct a municipal swimming pool at its recreation center. Contractor AB enters into a written contract and begins performing the work. During the performance of the work, Contractor AB goes out of business leaving the work about 50% finished. Additionally, some of the work that was performed was defective. Contractor AB has provided Municipality 123 with a performance bond. Municipality 123 can assert a claim against Contractor AB's performance bond for the cost to perform the unfinished work and the cost to correct the defective work. Thus, a performance bond protects the owner from the contractor's failure to perform in accordance with the terms of the contract. A performance bond does not provide protection against subcontractor or suppliers who have not been paid. A performance bond is also an indemnity bond. Example 3: Payment Bond Public Water District QQ has retained Contractor ZZ to install a new water tower. Because the project was over $25,000, Contractor ZZ was required by the Water District to provide a payment bond. Contractor ZZ completed the work, but failed to pay Subcontractor X for its work. Subcontractor X cannot pursue any claim against the Water District. However, Subcontractor X can assert a claim against the payment bond for the amount owed to it for its work on the project. Thus, a payment bond is designed to provide security to subcontractors and materials suppliers to ensure payment for their work, labor and/or materials on the project. A payment bond is also an indemnity bond. Indemnity Bonds: As set forth above, bid bonds, performance bonds and payment bonds are indemnity bonds. These bonds are not insurance policies. If a covered claim arises against a commmercial general liability policy, the insurer has a contractual obligation to indemnify and defend the insured (i.e. the party obtaining the policy) and cannot seek repayment from the insured for amounts paid out as a result of a covered claim. If a claim arises and is paid out on a bid bond, performance bond or payment bond, the surety (the party issuing the bond) will look to the contractor to indemnify and defend it. So, if a claim is asserted against Contractor XYZ's performance bond, the surety is going to look to Contractor XYZ to defend the lawsuit and to pay any damages.

FASB Backs EITF Decisions on Four Issues

Based on the FASB's decisions at its most recent meeting, three Emerging Issues Task Force (EITF) consensuses will be issued as proposals for public comment. A fourth will be published as a final standard.

1. EITF Issue No. 09-G, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts,” will be issued as a final standard.
2. The board also agreed to publish EITF Issue No. 09-H, “Health Care Entities: Revenue Recognition,” as a proposal. The proposed amendment to U.S. GAAP calls upon health care providers to disclose the policy for considering the collectability of an unpaid medical bill.
3. The task force agreed to seek public comments on EITF Issue No. 10-A, "How the Carrying Amount of a Reporting Unit Should Be Determined When Performing Step 1 of the Goodwill Impairment Test,"
4. The task force agreed to seek public comments on EITF Issue No. 10-G, “Disclosure of Supplementary Pro Forma Information for Business Combinations.”

Source: WG&L Accounting & Compliance Alert Checkpoint 9/30/2010