Disclosures Jan/Feb 2011 by The Warren Group

Brought to you by the Virginia Society of CPAs

THE SUSTAINABILITY

JANUARY/FEBRUARY 2011 I VOL. 24 NO. 1 I WWW.VSCPA.COM

ISSUE

12 14 24

B Prepared for B Corps Giving Accounting the Green Light Cleantech: Get Plugged In

Green Is Good, But Sustainable Is Better

Family Business

Not-For-Profit

Corporate

Entrepreneur

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INSIDE this issue

cover story >>

94 percent of small or mid-sized businesses are somewhat or very interested in being known as a successful business that is committed to its community and the environment.

FEATURES Giving Accounting the green light

ARTICLES

B corps are poised to enter the market

Accounting Practice Sales, inside back cover ADP Small Business Services p. 3 Audimation p. 29 Beth A. Berk, CPA p. 19 CPA Mutual p. 43 CPA2Biz, Inc., inside front cover Geico p. 7 Keiter, Stephens, Hurst, Gary & Shreaves, back cover Tax Solutions Alliance p. 9

Line Items

Data Draft

Self-Assessment

VSCPA News

Member News

VSCPA Educational Foundation

Classifieds

I Am

VSCPA Insurance Service Center p. 27

disclosures

If this surviving export tax incentive still provides 50 percent income tax savings, why is it so underused?

Backtalk

Board of Accountancy 8

Advertisers Index

“Cleantech” is a broad term that applies to a diverse industry that includes renewable energy solutions, technologies for efficiency products and much more.

Discovering IC-DISC

10 ways to jump job-hunting hurdles

Sustainability

CPAs are positioned better than any other professional to advise their clients or companies on how they can save money and make money by being green and sustainable.

Cleantech: Get Plugged in

Market KnowlEdge 14

Sustainability is now a worldwide movement that cannot be ignored — especially if you’re a CPA.

Green is good, but sustainable is better

SECTIONS

Our mission is to enhance the success of CPAs.

is published bimonthly for members of the Virginia Society of CPAs.

DISCLOSURES

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JANUARY/FEBRUARY 2011

Virginia SOciety of Cpas

4309 Cox Road Glen Allen, VA 23060 Ph. (800) 733-8272 Fx. (804) 273-1741 www.vscpa.com

disclosures Editorial Staff Jill Edmonds Managing Editor disclosures@vscpa.com Jenny Hansen Communications Director jhansen@vscpa.com Tina Lambert, CAE Vice President, Member & Public Relations tlambert@vscpa.com Editorial Task Force Joan D. Aaron, CPA William C. Barrett III, CPA/ABV Beth A. Berk, CPA James D. Cole, CPA Cheri G. David, CPA, CVA James P. Davis Jr., CPA William C. Foote, CPA/ABV, CVA Heather L. Judson, CPA Clare K. Levison, CPA Gabriele Lingenfelter, CPA Haven S. Pope, CPA, MBA, CFE George D. Strudgeon, CPA Philip H. Umansky, CPA, Ph.D. Deadlines Articles and advertising for future issues are due by 5 p.m. on the following dates: May/June 2011 July/Aug. 2011 Sept./Oct. 2011 Nov./Dec. 2011 Jan./Feb. 2012 Mar./Apr. 2012

Feb. 15 Apr. 15 June 15 Aug. 15 Oct. 15 Dec. 15

Statements of fact and opinion are made by the authors alone and do not imply an opinion on the part of the officers, members or editorial staff. The Warren Group Design / Production / Advertising thewarrengroup.com custompubs@thewarrengroup.com

DISCLOSURES

BACKTALK you said it

Fall Inauguration feedback Just wanted to say “Thanks Again” for a wonderful evening last Friday at the 2010 CPA Fall Inauguration. Having relocated and transferred my license from PA, this was a tremendous welcome to the VSCPA. The comments by Mr. Neuland and Mr. Dickerson were enlightening as we all work to protect our profession and serve the public. Thanks to Ms. Peters, Mr. Jones and all who worked to make this a special event. Thanks for your consideration and hospitality. Pat Miorin, CPA AFCEA International, Fairfax

From the VSCPA LinkedIn Group >>

Revenue recognition for government contractors Many government contractors use a method of recognizing revenue called “Percentage Completion Accounting.” The FASB & IASB have had a joint project to “clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS...” The FASB & IASB have now issued their exposure draft on Revenue Recognition and based on my initial read, I believe that they have left this method pretty much alone. (See paragraphs 32 & 33 in the exposure draft.) The caveat is that the ownership of the work product or service for what they are calling “Continuous transfer of goods or services” must be vested continuously to From the the customer. Government contractors will need to review their contracts and Twittersphere >> make sure that any new contracts comply with the new rules in order to retain this @shawnter: accounting method. It’s nice seeing @WaterIsLife347 today at Mark E. Gottfried, CPA, MBA Williamsburg

the #VSCPA offices!

FROM THE VSCPA YOUNG PROFESSIONALS MEETING >>

@Starzskymoon:

In general, there are so many positive aspects of being a CPA. You gain instant respect and recognition at your firm and with your clients, and you open the door for numerous future business, networking and professional development opportunities. Chris Edmunds, CPA

Cherry, Bekaert & Holland, Richmond

Get in touch

Getting ready to start day one of the #VSCPA 40th Annual Conference! @HenryDavisCPA:

Great professional issues update by Stephanie Peters. #VSCPA BLOG: www.cpacafe.com Twitter: @VSCPANews, @FinancialFit LinkedIn: http://tinyurl.com/VSCPALinkedInGroup Facebook: www.facebook.com/VSCPA

At the Virginia Society of CPAs, we love to hear from you. Whether it’s a quick e-mail to a staff member, chat on the phone, Disclosures letter to the editor, tweet, blog comment or something different altogether, let us know what you’re talking about, how you feel about different issues affecting CPAs and how we can help.

ATTENTION: NEW TAX FILING MANDATES ON JANUARY 1ST

Tax laws are constantly changing. With ADP, you have a partner who will keep you and your clients in the know. ADP will keep you informed of the latest rules and standards, so you can run your business more efficiently and serve your clients better. Government deadlines? Newly-instituted penalties? We’ve got you covered.

DID YOU KNOW: • Effective January 1, 2011, virtually all businesses will need to switch to the IRS Electronic Federal Tax Payment System (EFTPS) for all federal tax payments.

• New regulations will eliminate the IRS paper tax deposit system that employers have used since World War I.

• Businesses must use EFTPS or face 10% penalties for taxes paid by check. ADP can help your clients avoid costly penalties. Call (877) 480-1778 or visit www.adp.com/efilemandate.

LINE items From the editor >>

Notice anything different? Last issue we débuted the new Disclosures — simpler yet bolder, relevant yet member-focused. The Disclosures redesign follows the rebranding of all VSCPA communications that was completed in 2010. While the magazine has a new look and feel, it is designed to complement the VSCPA brand overall. That’s why you’ll notice more member photos throughout the magazine, more Virginia-specific content and easierto-follow feature articles. And we’ll still pack Disclosures with the professional information you’ve come to expect.

5 Green Office Tips >>

New sections include “Backtalk,” where we print your comments and thoughts from a variety of media; “Data Draft,” to satisfy any urge you might have for relevant statistics and numbers; and “I am the VSCPA,” a more light-hearted look at VSCPA members. How do you like it? Have comments, questions or suggestions? We welcome them. E-mail me at jedmonds@vscpa.com. n

1. PAPER: Set the default on all printers to double-sided rather than single-sided. 2. ELECTRICITY: Install motion-sensor lights in storage areas, mailrooms, staff lounges and other areas without high traffic. 3. MEETINGS: Encourage using online meeting software to facilitate teleconferencing rather than travel. 4. RECYCLING: Put a small recycling bin in every cube and office next to the trash can. 5. DISPOSAL: Exercise responsible disposal of toxic e-waste like computers and phones.

DISCLOSURES

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Advocating for CPAs In addition to its chief legislative charge to protect the CPA profession and designation in Virginia, the VSCPA will tackle the following legislative/regulatory agenda in the 2010–2011 year: • Advocate for automatic conformity of Virginia’s tax code with the federal tax code. • Advocate for financial literacy education, including a one-credit course as a mandatory graduation requirement in Virginia high schools. • Participate in studies and commissions addressing issues that affect the profession.

JANUARY/FEBRUARY 2011

• Support the continued independence and expertise of the Virginia Board of Accountancy. • Advocate for CPAs on federal legislative and regulatory matters, including but not limited to financial reform, tax preparer registration and tax strategy patents. • Support and promote practice mobility among all states. For more information on these agenda items, contact VSCPA Government Affairs Director Emily Walker at ewalker@vscpa. com or (804) 612-9428. n

LINE items Sharing the wealth >>

McDonnell tackles government procurement The Virginia government uses outside vendors and firms for a variety of needs, and Gov. Bob McDonnell wants to make sure that small, women and minorityowned (SWAM) businesses are receiving enough contracts. That’s why he created the Governor’s Supplier Diversity Advisory Board, which will develop recommendations to revamp current SWAM business procurement programs. McDonnell has his eye on spurring economic growth.

Approximately 75 percent of new job growth in Virginia is due to small business hires. The board, chaired by Virginia Secretary of Administration Lisa M. Hicks-Thomas, held its first meeting in August 2010. The 18 board participants include small business owners, state procurement officers and legislators. At press time, the Board’s recommendations were not yet available. SWAM CPA firms that bid on Virginia government contracts or are interested in government contracting should take note — there could be incentives or guidelines for contracting in the Board’s recommendations. The VSCPA will keep you apprised of any developments. n

Now in effect >>

Red flags are waving After numerous delays, the Federal Trade Commission (FTC) began enforcing its “Red Flags” rule on December 31, 2010. The rule requires financial institutions and creditors to have identity theft prevention programs to identify, detect and respond to indications of identity theft. CPAs in public practice, however, will likely be exempt. That definition of “creditor” originally encompassed CPAs and CPA firms, which are already subject to confidentiality requirements, and the profession fought hard for an exemption. At press time, both the U.S. Senate and House of Representatives had passed a bill, S. 3987, which narrows the definition of creditor so that is does not include service providers — thus likely excluding CPAs in public accounting from having to comply with the Red Flags rule. The bill is on the President’s desk at press time. This bill may exempt CPAs in public practice, but CPAs serving small businesses and nonprofits will still need to comply. n

BONUS FEATURE

“Security Concerns Every CPA Firm Should Consider,” by Trey James — Available now at www.vscpa.com/Disclosures in the 2011 archives.

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JANUARY/FEBRUARY 2011

DATA draft HOME RUN? >>

Virginians and the homebuyer tax credit • $678.9 million: Virginians’ haul of homebuyer tax credits under the Housing, Recovery and Assistance acts • 93,310: Number of claims made by Virginians • 11: Virginia’s state ranking based on amount claimed. California was No. 1. • $27.62: Dollar amount per Virginia resident claimed under Housing Act • $58.51: Dollar amount per Virginia resident claimed under Recovery and Assistance acts combined Source: U.S. Government Accountability Office, September 2, 2010

NUMBERS SPEAK >>

Where Virginia stands No. 16:

No. 2:

“Best States for Business,”

Utah steals top spot Report,” RealtyTrac.com. That’s for Q3 2010, and reflects an 8 from Virginia. percent increase in foreclosures over Q2. Forbes.com.

No. 6:

“Top 10 Wealthiest States,” CNNMoney.com. Median

in Virginia is $61,126.

income

No. 7:

“Best Run States in America,”

GREEN OPINIONS >>

The percentage of CEOs

worldwide who believe sustainable practices are critical to their businesses’ success, from an Accenture and United Nationals Global Compact survey.

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“U.S. Foreclosure Market

Virginia makes the top 10 for high median household income, low violent crime and unemployment rank, AAA state credit rating and more.

No. 18:

“19th Annual Highway Report,” Reason Foundation.

That’s a sixspot decrease from last year, but Virginia’s rural highways rank No. 1.

24/7 Wall St.

No. 12:

“State Business Tax Climate Index,” Tax Foundation.

South Dakota’s tax system is most welcoming to economic activity while New York’s tax code ranks the worst.

JANUARY/FEBRUARY 2011

No. 27:

Volunteering ranking, VolunteeringinAmerica.org.

Approximately 28 percent of Virginia residents volunteer.

DATA draft THERE’S A MAP FOR THAT >>

Stacking Virginia against its neighbors If you want to fulfill your burning desire to review Virginia against its neighbors in the Fifth Federal Reserve District (District of Columbia, Maryland, North Carolina, South Carolina and most of West Virginia), check out the new Map Resource Center from the Federal Reserve Bank of Richmond at http:// tinyurl.com/RichmondFedMaps. You’ll find maps broken out by tax creditqualified areas, community investment programs and more. n

Life is decent in Roanoke Roanoke ranks No. 44 out of 109,

according to a survey by Portfolio.com on the quality of life in mid-size metropolitan areas with populations between 250,000 and 750,000. Roanoke is the only Virginia area on the list, which was dominated by western cities. Nos. 1 through 5 are Boulder, Co.; Provo, Utah; Fort Collins, Co.; Madison, Wis.; and Ogden, Utah. The survey evaluated census data on economies, cost of living, traffic, housing stocks and education. n

I’m here to save you money. Your VSCPA membership could save you even more on car insurance. Get your FREE quote today.

1-800-368-2734

Discount amount varies in some states. One group discount applicable per policy. Coverage is individual. In New York a premium reduction is available. Some discounts, coverages, payment plans and features are not available in all states or companies. Government Employees Insurance Co. • GEICO General Insurance Co. • GEICO Indemnity Co. • GEICO Casualty Co. These companies are subsidiaries of Berkshire Hathaway Inc. GEICO: Washington, DC 20076. GEICO Gecko image © 1999-2011. © 2011 GEICO

DISCLOSURES

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JANUARY/FEBRUARY 2011

Board of accountancy

QUICK QUESTIONS >>

Does everyone undergo a CPE audit? Nope. Audits are randomly selected by the VBOA each month. If selected, you will receive an electronic notification requesting CPE certificates for your threeyear reporting cycle.

Is there any easy way to keep track of my completed CPE courses? Definitely. Use the “CPE History” tool under “CPE” at www. vscpa.com. The VSCPA will automatically track all courses you take from the VSCPA, including Virginia ethics. To keep a complete history, you can add other, outside courses or self-study programs to your personalized “CPE History” tool. The “CPE History” system is approved by the VBOA as proof of attendance for VSCPA events.

What if my employer keeps track of my in-house CPE for me? Will the VBOA accept this report instead of certificates? Yes. An employer’s report on in-house CPE is acceptable if it contains all required information: name of course provider, title and description of course, date of program and number of CPE credits awarded.

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CPE SCRUTINY >>

Pass your CPE audit with flying colors Did you know that many CPAs who undergo a CPE audit from the Virginia Board of Accountancy (VBOA) are reprimanded for failure to obtain the required Virginia ethics course and/or failure to maintain the required documentation? Usually, the Virginia ethics course requirement is CPAs’ Achilles’ heel — many forget about it or take a course that didn’t qualify. Don’t let this happen to you! Follow the below suggestions: KNOW YOUR REQUIREMENTS: Your

CPE requirement depends on how you are using or plan to use the CPA designation regardless of public or private practice. Visit the VBOA website at www.boa. virginia.gov to make sure you know your CPE requirements. SATISFY YOUR ETHICS REQUIREMENT:

All active, licensed CPAs who provide services to the public or to an employer using the CPA title must sit for the 2-hour Virginia ethics course every year. It is the responsibility of the CPA to ensure the course meets the VBOA’s content outline. Visit the “Ethics” section under “CPE”

JANUARY/FEBRUARY 2011

at www.vscpa.com for information on the VSCPA’s course, which does meet the VBOA outline. KNOW YOUR CPE REPORTING CYCLE:

Every CPA’s CPE reporting cycle is the three calendar years immediately preceding the current year. Example: For the 2011 CPE reporting cycle, make sure you have records of CPE taken in 2008, 2009 and 2010. KEEP YOUR CERTIFICATES: If you are

selected for a CPE audit, you must send the VBOA copies of the certificates you received after completing CPE courses for the three-year reporting cycle. n

Board of accountancy

VBOA proposes adjustments to CPA licensure and other fees Why the proposed increases? According to the VBOA, its expenses the past few years have exceeded its revenues. As an independent, non-general fund agency, the VBOA’s only source of revenues is the fees it charges for services. (By Virginia law, any penalties assessed by the VBOA for violations of the accountancy statutes and regulations do not provide revenues for the VBOA, but are rather deposited into the Commonwealth’s Literary Fund.) In 2007, 2008 and 2009, the VBOA’s operating expenses exceeded its revenues, causing gaps that were funded through

transfers of cash from the Trust Account. The VBOA forecasts that it will be out of cash in both accounts by June 30, 2012. The VBOA also notes in its proposal that the current fees are considerably lower than the fees originally adopted in 1991, but the proposed fees are not significantly higher. Also, according to the VBOA, the proposed fees are lower than those charged by other states — in some cases, significantly lower. Check out more on this topic at www.vscpa.com/VBOAFeeProposal. n

Tax Collection Problem Before

Tax Collection Problem After

In the future, the costs associated with obtaining and maintaining a CPA license in Virginia could increase. On November 10, 2010, the Virginia Board of Accountancy (VBOA) issued a proposal to adjust the fees it charges for services it provides. For example, the VBOA is proposing to increase the cost of processing an application for issuance of an individual Virginia CPA license from the current $24 to $100. And the VBOA would begin charging $20 to process applications to retake one or more sections of the CPA Exam. For a complete list of fees the VBOA would charge for various services under the current proposal, visit www. vscpa.com/VBOAFeeProposal.

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JANUARY/FEBRUARY 2011

MARKET knowledge

Not landing that job? 10 reasons why BY BETH A. BERK, CPA

How do you rate on the “3 C’s?”:

Communication (verbal), communication (written), and communication (physical).

Have you been on interviews that you thought went really well only to find out you didn’t get the job? If you have been looking, you probably noticed that you did not receive any feedback. Or, maybe the feedback you received was not constructive enough to help you understand what you could do to improve your chances next time, assuming it is something you can change. Getting feedback to improve your interviewing skills and résumé is crucial to getting ahead. Feedback comes in many shapes and forms. For example, getting a promotion or getting hired is what some may consider a positive form of feedback. On the flipside, interviewing several times for a job, and not getting it or any comments as to why, could be viewed as negative feedback. Are your résumé, cover letter and/or e-mails showstoppers? Or, after taking the time to participate in a telephone interview or screening, does the buck stop there? Without receiving feedback, especially after a telephone interview (which is very common), or after a face-to-face interview where you stood out from what most likely was a pile of résumés, it is hard to know what went right — and what did not. Unfortunately, due to legal issues, discrimination laws and just plain, old work overload and résumé competition, fewer words, if any, are shared with prospective employees. If you are fortunate enough to work with a third-party recruiter (staffing company, headhunter, etc.), you may be privy to very useful feedback. Below are some common reasons (or, shall we say, “blunders”) that keep many seekers from landing the job. This list is not intended to include the more obvious reasons why one may not get noticed during the employment search process (e.g. typos, wrong technical background or qualifications, unreasonable commute, sponsorship requirement if not a U.S. citizen, cost-prohibitive salary requirements, etc.).

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JANUARY/FEBRUARY 2011

Physical communication skills may not be as obvious as verbal and written, and are more subjective. Some people do not look you straight in the eye when talking, which may be viewed as hiding something. Others may think the person lacks confidence or is uncomfortable about something. Maybe you fidget with your hands and feet when meeting someone new. Maybe you sit with your arms folded in front of you, which may be considered negative body language. All in all, body language and how you communicate verbally and in writing is very important. Are you aware of how you communicate?

A ns w er t h e question :

Yo u d o not provide information requested and/or do not answer the questions during an interview. If you don’t answer a question, the interviewer may interpret that you do not know the answer or have the appropriate experience, or may think that you embellished your résumé (refer to No. 7 ).

one j ob too m any:

Depending on which generation you belong to, switching jobs every year or two seems to be the norm. Prior to the recession, professionals may have been encouraged to switch more frequently. In today’s job market, having too many jobs may be a showstopper in and of itself.

MARKET knowledge

“ J O RT ” :

You have displayed some form of the following or lack thereof — judgment, ownership, responsibility and/or trust. Ask yourself, “If I was a hiring manager, would I hire myself?” When you are being interviewed, the interviewer may ask questions to determine if you are the type of professional that recognizes that your behavior and values, and/or lack thereof, contribute to your ultimate success.

W h at d o you w ant to do?:

If you cannot answer this question, maybe you should not be sending out your résumé just yet. A good employer wants to know what you can do, your commitment to the job/ profession and more. Some employers are “body shops” and will hire you regardless, so beware! To be simple, if you are unclear as to where you are going, the interviewer will be unclear as to where you are going, too.

“Rah, rah sis boom bah”:

Can you tell I was a cheerleader? Lack of enthusiasm or interest is certainly a deal breaker. An interview involves presenting your best self and interacting with others. Think of it like going on a first date with someone you really wanted to go out with. Did you smile? Ask questions?

“Swear to tell the truth and nothing but the truth”:

If you were being deposed at a trial, how would you answer tough questions? Employers may ask if you left a job or the job left you, if your résumé includes all jobs since you graduated (even if in summary for earlier jobs), if the employers noted paid your paycheck themselves or if you were paid via a thirdparty contractor/staffing company, and more. In today’s world, it is very easy to obtain information and many employers conduct some form of background check. If you are asked to complete and sign an employment application, there usually is some language indicating that by completing and signing the application, you are presenting truthful information.

“I have a mortgage to pay, so I need to make $$$$”:

Are you asking for too large of an increase? Unless you have been grossly underpaid, in which case a large increase may be warranted, avoid making this mistake.

Do your homework and find out salary ranges for different levels of experience, education and skills, and for different geographical locations too.

“What did you do between 1996 and 2000":

Beware of gaps in employment not explained and/or dates that don’t match up. Put yourself in the hiring professional’s shoes. If you noted a gap on someone’s résumé, what would you think? Account for your time and how it was spent (e.g. family sabbatical, overseas relocation, etc.).

Th e “3 C’ s”:

Communication (verbal), communication (written) and communication (physical): Because communication is so important, this is worth repeating! Need I say more?

Happy hunting Keep in mind that if you were to interview lots of hiring professionals, this list could go on and on. For now, keep this list handy to determine if any of these apply to you. Until next time, good luck with your search. n

BETH A. BERK, CPA

is an independent recruiter based in the metropolitan D.C. area who tends to focus on placing CPAs and CPA candidates, as well as other professionals. Contact her at BethABerk@msn.com or (301) 767-0670.

DISCLOSURES

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JANUARY/FEBRUARY 2011

SUSTAINABILITY

B prepared for a new kind of corporation BY JENNY HANSEN

On April 14, 2010, Maryland Gov. Martin O’Malley signed into law the nation’s first legislation creating a new class of corporations required to create benefit for society in addition to its shareholders — Benefit Corporations, or B corporations. Just a month later, Vermont followed suit. According to B Lab, a Pennsylvaniabased nonprofit committed to spreading the B corp mission, several other states are looking at introducing legislation in the near future — Colorado, New York, North Carolina, Oregon, Pennsylvania and Washington, to name a few. But what exactly is a B corp? Unlike traditional corporations, B corps are required by law to show they’ve netted a positive societal benefit. They must consider the effect of their decisions on employees, their communities and the environment. What’s more, they have to prove it publicly by reporting annually on their social and environmental performance based on recognized third-party standards. Transparency and accountability are key. Currently, those reports include B Lab’s “B Impact Rating System,” which is available to all companies, B corps or not. B Lab also launched the Global Impact Investing Rating System (GIIRS) —a ratings agency that provides social and environmental impact ratings for

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JANUARY/FEBRUARY 2011

Sustainability

companies and funds seeking to raise capital from impact investors. The GIIRS has developed a rating system that will help companies assess their social and environmental impact as well as investment portfolios and funds, like S&P credit risk ratings. In other words, it will help benchmark companies’ “goodness.” The GIIRS builds on the Impact Reporting and Investment Standards (IRIS) taxonomy, developed by B Lab, which is designed to function across a variety of sectors to measure and communicate social and environmental impact. According to www.iris-standards.org, it leverages several frameworks, including International Financial Reporting Standards (IFRS). In October, 25 GIIRS Pioneer Funds were announced. These will be the first funds to receive GIIRS ratings, creating a global population of GIIRS-rated funds. A beta version of GIIRS will be launched with the GIIRS Pioneer Funds starting in January 2011. A public launch is planned for the second quarter of 2011. Ten percent of B corporations are audited each year, overseen by the Standards Advisory Council (SAC), which is an independent body (one member of B Lab managements sits on the Council) tasked with ensuring that the B Rating System is a fair yet rigorous standard for social and environmental performance. In 2008, all eight companies that were audited passed. Overall, the point is to create truly sustainable companies that will benefit people and the planet and also (or as a result, perhaps) profit themselves. Unlike with traditional for-profits, the bottom line is just as important as benefitting society

B corps are required by law to show they’ve netted a positive benefit to society. and the environment for B corps, with the idea that doing the right thing will yield both tangible and intangible benefits. New and established organizations can become B corps with a two-thirds majority vote from shareholders, if a switch is required. Despite the fact that “B corporation” is recognized as a legitimate status, as of now, B corps lack an official tax status distinguishing them from S or C corporations.

The movement for corporations to remain for-profit while shifting toward a more nonprofit way of thinking is hot right now. The question is: How might this movement affect CPAs and what should CPAs do now to become prepared? For instance, should CPA firms consider becoming B corps? TriLibrium, an Oregon-based CPA firm, announced it was certified as a B corp in July 2009. Will others follow? And what will CPAs with B corp clients need to know in terms of reporting? Now is a good time for CPAs to get up to speed and identify issues and opportunities that might stem from this movement. It’s always smart to B prepared. n

B Lab’s website reports there are more than 325 B corps in existence, representing $161 billion in revenues and $1 million in annual savings across 54 industries. Founders include big names like WorkplaceDynamics, Management Resources and PhilanTech, LLC. Current B corps in Virginia include BetterWorld Telecom, Beyond the Bottom Line, Global Skills X-Change, Impact Makers, Inc. and Lateral Line. In addition to offering model legislation to assist states, B Lab also offers a number of other tools to help companies make the switch, including a state-by-state legal roadmap for making the switch, term sheets, resources to help companies improve audit committees and implement financial controls, and more.

DISCLOSURES

JENNY HANSEN

is the VSCPA communications director. She oversees the Society’s communications and public relations initiatives. Contact her at jhansen@vscpa.com.

Explore the B Corp World

B LAB: www.bcorporation.net IMPACT REPORTING AND INVESTMENT STANDARDS: www.iris-standards.org TRILIBRIUM: Oregon-based B Corp CPA firm, www.trilibrium.com GLOBAL IMPACT INVESTING RATING SYSTEM: www.giirs.org

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JANUARY/FEBRUARY 2011

SUSTAINABILITY

GREEN VIRGINIA

GREEN JOBS TAX CREDIT: A new tax credit grants $500 for each new green job created in Virginia with an annual salary of $50,000 or higher. Green jobs are those in the manufacturing and operation of renewable or alternative energy products and technologies used to generate electricity and energy. Taxpayers can claim the credit for up to 350 jobs.

BY JILL EDMONDS

GREEN REBATES: In 2009, Virginia received $40 million for green rebates from federal stimulus initiatives. Funds supported approved energy-efficient products, solar and wind energy systems and biomass and wasteto-energy projects. INCOME TAX DEDUCTION: Taxpayers in Virginia can take personal deductions for 20 percent of the sales tax paid on eligible efficiency technologies (refrigerators, air conditioners, etc.) that meet ENERGY STAR requirements, not to exceed $500. INCOME TAX HOLIDAY: In October of each year, Virginia shoppers receive a four-day holiday from sales tax on Energy Star products $2,500 or less.

DISCLOSURES

Giving Accounting the “Green” Light

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Trying to define “sustainable” isn’t so cut-and-dry.

ACCOUNTING FOR SUSTAINABILITY

If your office reduces paper consumption, is it a sustainable organization? Does sustainability refer to “going green?” Is it related to carbon credits some companies purchase? Is it about the planet, or is it about people?

With businesses becoming more sustainable every year, the question looms: How do we measure what companies are doing? CPAs are a perfect fit to become involved. Analysis, fact-finding, organization and auditing are all skills in a CPA’s toolbox.

Well, that’s all correct, but it’s a lot more. “Sustainability,” when referring to businesses, now commonly encompasses the consideration of environmental and social responsibility in addition to economic viability. It’s about maintaining profits with respect to people and the planet. See “Green Is Good, but Sustainable Is Better,” on page 16, for an in-depth look at the definition of sustainability. Sustainability is now a worldwide movement that cannot be ignored — especially if you’re a CPA.

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The American Institute of CPAs (AICPA) became involved in 2008 with “Accounting for Sustainability” (known as A4S), a project led by the Prince of Wales to bring organizations together worldwide to “develop practical tools to enable environmental and social performance to be better connected with strategy and financial performance, and thereby embedded into day-to-day operations and decision making.” Since then, the movement has continued to escalate.

Sustainability The Prince gave a videotaped address to the AICPA Governing Council at its October 19, 2009, meeting, emphasizing the importance of using current valuation, decision making and reporting systems to report sustainability performance. He called upon the CPA profession specifically, stating: “Who better to take the lead and set an example than the accountancy profession which is, in so many respects, the engine room of the corporate world, and indeed, government?” On August 2, 2010, A4S and the Global Reporting Initiative (a group that developed a global sustainability reporting framework) formed the International Integrated Reporting Committee (IIRC) to tackle the daunting task of integrating how companies connect financial reports with their sustainable activities. The IIRC brings the best players into the room. It comprises heads of the Financial Accounting Standard Board, International Accounting Standards Board and many other global organizations, as well as representatives from top international accounting firms and governance organizations. Essentially, the IIRC will work to develop one model of reporting that works worldwide. Currently, different organizations are developing reporting standards, but there is not one consistent model.

reporting burden on companies and other entities. Rather, it is to help them and all their stakeholders make better resource allocation decisions.”

CAREER OPPORTUNITIES In addition to the possibilities open to CPAs to help businesses with sustainability accounting, there are other burgeoning career avenues.

CPAs can also be instrumental in helping calculate costs associated with carbon credits. Many environmentally conscious companies are participating in cap-andtrade, in which they purchase carbon credits to help reduce pollution emissions. There can also be tax consequences associated with cap-and-trade, and CPAs well-versed in tax law could find themselves in high demand by companies in need of guidance in this area. n

Many industries are starting to proactively calculate the fiscal costs of their environmental footprints — and making adjustments where necessary. Accountants well-versed in environmental issues and companies’ financial reports can become important components to environmental accounting efforts. CPAs can help show the correlation between sustainability and (often reduced) costs over time — particularly if they work in specific industries, such as manufacturing. According to the AICPA, “accounting for sustainability involves linking sustainability initiatives to company strategy, evaluating risks and opportunities and providing measurement, accounting and performance management skills to ensure that sustainability is embedded into the day-to-day operations of the company.”

JILL EDMONDS

is managing editor of Disclosures. Contact her at jedmonds@vscpa.com

GROW YOUR GREEN KNOWLEDGE

ACCOUNTING FOR SUSTAINABILITY: www.accountingforsustainability.org INTERNATIONAL INTEGRATED REPORTING COMMITTEE: www.integratedreporting.org AICPA SUSTAINABILITY

So, a major question remains: Is this going to be one more reporting standard that companies must learn and follow?

Sustainability has also entered the C-suite, with some companies appointing chief sustainability officers to oversee programs on environmental awareness, corporate social responsibility and more. Other titles in this area can include sustainability director, director of environment and environmental policy manager.

Not necessarily. According to Ian Ball, CEO of the International Federation of Accountants, an IIRC participant, “The goal of the IIRC is not to increase the

According to Wikipedia, “companies have created such positions in the 21st century to formalize their commitment to the environment.”

www.vsbn.org

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ACCOUNTING, REPORTING, ASSURANCE, TAX AND OTHER SERVICES WEBSITE: http://tinyurl.com/ SustainabilityAICPA VIRGINIA SUSTAINABLE BUILDING NETWORK:

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SUSTAINABILITY

‘Green’ Is Good, but ‘Sustainable’ Is Better By Aaron Nelson

SHOWING THE WAY >> Sustainability is not only a strategy the business community can buy into, but a movement that the business community should lead.

ometimes it is hard to know the difference between a fad and a trend. Some trends are small and change how we behave in modest ways, while others are quite large and dramatically change how individuals and organizations behave and operate. “Green” is a mega-trend that is changing forever how organizations and individuals consume energy, utilize resources and dispose of waste. Businesses and nonprofits across the globe are discovering there is money to be saved and made by implementing green practices, and these enterprises are scrambling to align with the global greening trend.

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Sustainability GREEN VERSUS SUSTAINABLE “Going green” is good. It makes business and accounting sense to efficiently use limited and/or expensive resources — to reduce the consumption of electricity and water, to purchase less Styrofoam and paper, to put less in the dumpster and more in the recycle bin. But while green is good, sustainable is better. It is important to be a good environmental steward, but for both businesses and communities to be successful, they will have to pay attention to more than just their environment. The successful future of our businesses, our clients and our communities requires a balanced approach — a focus on sustainability. A few definitions:

First, “green.” Green is almost always and exclusively about the environment and protecting it. Green is about energy, waste, water, pollution, transportation choices and resource consumption. Be careful of the related term “greenwashing,” which means faking it. Do it or don’t do it, but don’t fake it. Now, “sustainable.” Sustainable has several definitions. The first formal definition was offered by the United Nations World Commission on Environment and Development, which defined sustainability as “meet[ing] the needs of the present without compromising the ability of future generations to meet their own needs.” The most popular and most accepted definition is also known as the “triple bottom line.” Sometimes referred to as the “three E’s” (equity, environment and economy) or the “three P’s” (people, planet and profit), the triple bottom line

refers to measuring success based on outcomes in these three areas.

be more pressure to do so. Walmart’s aspirational sustainability goals and decision to implement sustainability reporting for all products sold and all of their 100,000 suppliers will have huge effect on other businesses’ practices.

I think the best definition is expressed in the mission of North Carolina’s Foundation for a Sustainable Community, which defines sustainability as “environmental stewardship, social responsibility and economic prosperity.”

CLIMATE CHANGE: Nearly all

scientists and politicians now agree something is happening related to the climate, and even those who do not think humans had anything to do with it agree that we can do something about it.

The University of North Carolina’s Kenan-Flagler Business School Center for Sustainable Enterprise says a sustainable business is one that “employs profitable strategies that approach social and environmental challenges as business opportunities and minimize negative social and environmental impacts.”

CUSTOMER AND EMPLOYEE DEMAND: Customers are

increasingly caring about the behavior of companies and the sustainability of products. Employees may care even more and want to work for green and sustainable organizations, particularly Generations X, Y and Z.

Adoption of green and sustainable business practices are being driven by six powerful forces: CAPITALISM: Sustainability has a

positive impact on the bottom line, organizational branding, reputation and the likelihood of long-term financial success. REGULATION: Reaction to real

and anticipated regulation is driving organizations to become more efficient, carbon-aware and community-invested. INNOVATION: What sounded crazy

10 years ago isn’t so crazy anymore; new developments are announced weekly. Examples include effective carbon scrubbers, bio-fuels, solar power generating window treatments, waterless urinals, pervious pavement and plastic-like drinking cups made of corn. COMPETITION AND PEER PRESSURE: As more companies

adopt sustainable practices, there will

THE BUSINESS OF SUSTAINABILITY Unlike the environmental movement, which spent its first 30 years wagging a judgmental finger at the business community and trying to regulate business behavior, the concept of sustainability is a holistic, collaborative approach. Sustainability is not only a strategy the business community can buy into, but a movement that the business community should lead. Big business is already moving rapidly toward sustainability and leadership is coming from some unexpected, though mighty, sources. As reported by GreenBiz.com, Walmart has adopted three powerful, aspirational sustainability goals: 

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Sustainability >>

Implement today

EASY SUSTAINABILITY ENVIRONMENT • Track your monthly power and/ or water bill and internally report it. If that’s the landlord’s business, ask her for a copy and see if you can move the needle. • You can cut office paper use by half in a hurry. Keep up with and report monthly copies, go double sided, print on the back of previously used paper for drafts, etc. COMMUNITY • Set goals for employee volunteerism, like 100 percent of senior management will serve on the board of a nonprofit, or each employee will do four hours of community volunteerism a year, and then report on it. • Set a modest goal for value of cash and in-kind support of local community organizations and initiatives, and then brag when you exceed them. PERFORMANCE • Put in writing your communications plan, succession plan, what-wouldwe-do-if-the-office-flooded plan, etc. • Decide how you are going to make your organization, or the one you are advising, more appealing to Generations X, Y and Z. • Develop tangible, even if small, ways to reward creativity and innovation.

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1. Achieve 100 percent renewable energy supply. 2. Create zero waste. 3. Sell products that sustain our resources and environment. In 2009, The New York Times reported that Walmart is taking the sustainability challenge to 100,000 of its suppliers and providers by asking each of them to fill out a 15-question survey about their social and environmental sustainability. “The idea is to create a universal rating system that scores products based on how environmentally and socially sustainable they are over the course of their lives. Consider it the green equivalent to nutrition labels,” The New York Times said on July 15, 2009. Sustainability’s triple bottom line of environmental stewardship, social equity and economic prosperity is proving to be a powerful and convening concept.

Pennsylvania and North Carolina: • 87 percent of respondents said their businesses have a responsibility to protect the natural environment. • 70 percent think their businesses gain some or great competitive advantage by being known as “green.” • 94 percent said they are somewhat or very interested in being known as a successful business that is committed to its community and the environment. • 70 percent believe that adopting sustainable business practices will make their organizations more successful in the long run. • Only 8 percent are aware of webbased tools to assist them with going green and sustainable.

“Now is the time to make sustainability a key pillar in your business planning.” — Bob Harris, 2009–2010 AICPA chair Sustainability focuses on the intersection of interests, the place where neither the social, nor the environmental, nor the economic objectives can be accomplished as well separately as they can be together. Sustainability is proving to be not only a powerful concept, but a popular one, even among our nation’s small and mid-sized businesses. Here are some results from a recent survey deployed by the Institute for Sustainable Development to 20,000 small to mid-sized enterprises (SMEs) through Chambers of Commerce in Ohio,

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Business and industry leaders agree that something big is happening, and the businesses that choose to take the lead on this trend are more likely to thrive. Sustainability is also moving fast in many places around the world. The most recent World Chamber Congress that convened 1,000 Chamber of Commerce executives from 100 countries in Kuala Lumpur, Malaysia focused on the theme of “Leading Sustainable Growth and Change.” 

Attention CPAs: Whether A Decision Maker Looking To Upgrade Your Talent, Or A CPA Looking to Upgrade Yourself/Your Skills, Ask Yourself: Who really chose who in joining your company? Are you/your professional staff really at the right level where you should be/you need them to be? Are you/your staff in a position that truly suits your/their personality, values, and professional and personal needs?

Why leave your future to chance? If you’re seriously interested in making the “right” move for your next hire, I can help you. I am an actively licensed CPA in Virginia with over 20 years of experience including public accounting (E&Y) and consulting (KPMG), financial accounting (American Cancer Society), internal audit (Moneyline Telerate), and recruiting (Acsys, formerly Don Richards). As a networker who truly enjoys helping others and sharing my career experiences to guide fellow professionals, here is how I can help you: Decision Makers:  Ask you questions, and most likely ask many more questions than other recruiters about your company, duties involved, skills required, corporate culture and more  Work with you on finding the “right” professional that is the “right fit”  Provide you with valuable information about the professionals I work with, the marketplace, what your competitors pay, and more Career Seekers:  Guide you on career paths available in public accounting and industry  Enable you to capitalize on your strengths  Coach you on how to put your best foot forward to find the “right fit”  Advise you when to stay in your current position if that is the right move If you’re interested in working with a recruiter who understands your background, skills, and is genuinely interested in helping you find the “right fit”, then I welcome meeting you!

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Sustainability

HELPING BUSINESSES BECOME SUSTAINABLE One program in North America focused on helping small and mid-sized employers go green and sustainable is Green PlusTM (www.gogreenplus.org). Green Plus is managed by the Institute for Sustainable Development (ISD), a public-private partnership of chambers of commerce, trade associations and universities, including Duke University, UNC Chapel Hill, Elon University and Research Triangle-based Chambers of Commerce. Green PlusTM is designed to educate, motivate and reward small employers while providing them with affordable, easy-to-use information for improving sustainability performance. Green Plus and ISD won the 2008 Siemens Foundation national award for leadership

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in sustainable development and the 2009 International Economic Development Council’s (IEDC) award for leadership in sustainable economic development. Green PlusTM is a triple bottom line sustainability program that helps businesses review their environmental stewardship (energy, water, waste, transportation), social responsibility (family-friendly policies, civic participation, corporate responsibility, volunteerism) and economic prosperity (business planning, performance measures, best practices). Green Plus participants also gain access to an online network of specialists, peer enterprises and the information support they need in order to make positive changes in their organizations. Sustainability is not about making due with less; it’s about thriving in a changing

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business environment. Sustainability is about improving the way that individuals and organizations engage their community and their environment and making them more successful for it. Sustainability is a prescription for both organizational and community success. Organizations that balance the triple bottom line of sustainability will be rewarded by their customers, employees and community. Today’s customers and employees are demonstrating a greater interest in supporting companies that share their values. In a national poll of 923 voters conducted by CapStrat and Public Policy Polling in July 2009: • 55 percent of respondents said being green and sustainable was a top or important priority for their employer when making decisions.

SUSTAINABILITY

• 83 percent of respondents said the sustainability of the merchant or service provider was somewhat or very important to them when making purchasing decisions. Fast Company reported on May 20, 2010, that a survey of 3,000 18- to 25-year-olds and 1,300 26- to 35- year-olds in the United States, Europe, India and China found 96 percent of the younger group and 98 percent of the older group “aspire to work in a greener office.” Sixty-seven percent of the 26- to 35-year-olds want their workplaces to be “environmentally friendly; i.e. well above regulatory compliance.” GETTING STARTED IN SUSTAINABILITY So, how do you get started? I recommend taking the following steps (loosely in this order):

FORM A TEAM: Start with a core

group of three who care about the topic and then expand to include a diverse group of managers and employees. Be sure to include some doubters because you will have to bring them along later anyway. GET SMART: Seek out and read

articles and books about going green and sustainable, and talk to people who are smarter than you on the subject and better understand the business case for sustainability. Your organization and/or your clients count on you to be well informed about major trends, particularly those that can help save and make money. SET GOAL(S): Develop goals and

objectives. Does your organization want to be the best of the best, to be

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in the top quartile in your industry, or just make modest improvements? Is your goal to save money, or to make money or both — or do you want to save the world? Decide, write it down and post it somewhere. Then be prepared to change and improve it over time. It doesn’t have to be perfect; it just needs to get started. GET BUY-IN: Seek investment and

buy-in from your organization on all levels, above and below. PICK THE LOW-HANGING FRUIT (AND EAT THEM): Once you

select a few areas in which you can make a difference and demonstrate measurable results, execute. Get some early wins in a few areas (see “Easy Sustainability” on page 18). DECIDE HOW TO MEASURE AND REPORT: Deliver internal reports 

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Sustainability >>

It’s easy being green Both the VSCPA and the American Institute of CPAs (AICPA) have achieved Green PlusTM Mover status by the Institute for Sustainable Development, demonstrating their commitment to becoming sustainable associations.

Over the past year, the VSCPA has undertaken several initiatives to increase its environmentally friendly practices, and developed a green policy: The VSCPA’s mission is to enhance the success of CPAs. To that end, the VSCPA is committed to enhancing CPAs’ success by offering environmentally sustainable events and benefits while continuing to provide a high level of member service, as well as communicating information to CPAs to help them make a commitment to sustainability. Examples of the VSCPA’s changes include: PAPER WASTE: Reducing amount of event manuals printed, offering discounts on registration fees for members who choose electronic manuals, eliminating printed agendas and newsletters for staff, using electronic display signs, reducing reliance on paper communication to members, implementing online forms, using paper for mass-produced communications and marketing materials that has been certified by the Forest Stewardship Council. FOOD AND BEVERAGE: Eliminating use of water bottles and using only water stations, providing staff with aluminum water bottles and encouraging use of refillable cups. TRAVEL: Increasing webcast offerings so members can attend events without commuting costs, offering staff the option of telecommuting up to three days each week. BUILDING: Encouraging staff to reuse boxing, shipping and packing materials; installing light motion sensors in restrooms, staff lounge and storage areas.

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first and build to external sharing. Your customers care, your employees care and the community cares, so measure what you are doing and tell them. THE CPA DIFFERENCE CPAs are poised to lead the way in sustainability. CPAs can and should play a central role in advising their organizations and/or their clients and in setting and helping execute organizational sustainability initiatives. At the October 2009 meeting of the American Institute of CPAs (AICPA) Governing Council, newly inaugurated AICPA Chair Robert Harris and CEO Barry Melancon both identified sustainability as a key opportunity for CPAs to bring value to the firms or industries they work for and the clients they serve. “Now is the time to make sustainability a key pillar in your business planning,” Harris said. CPAs are positioned better than any other professional to advise their clients or companies on how enterprises can save money and make money going green and sustainable — and how they can measure and track results. Like Harris and Melancon, I encourage CPAs to get involved in the front end by helping develop comprehensive plans, rather than simply measuring the outcomes. “Green” is big and here to stay. Expanding the notion of “green” to “sustainable,” a holistic approach that also includes social and economic objectives, is a far more powerful concept and approach. Business leaders should take the lead, help define the objectives and own the space around sustainability. Sustainability is a successful strategy to build more robust, successful businesses and communities prepared to meet the challenges of the future. n Printed with permission from the Institute for Sustainable Development. Copyright 2010.

Aaron NELSON, IOM is the president and CEO of the Chapel Hill-Carrboro (N.C.) Chamber of Commerce, co-founder and senior fellow at the Institute for Sustainable Development and a Ford Foundation Fellow for Regionalism and Sustainable Development. Contact him at anelson@carolinachamber.org. Learn more on Twitter @GreenPlus or visit www.gogreenplus.org.

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SUSTAINABILITY UNDER PRESSURE >>

The government and the market want you to go green.

Cleantech: Get Plugged In Is your firm or company prepared?

Every day seems to bring a new claim by a company about going “green.” Are they just following the Hard Rock Café motto and trying to “Save the Planet,” or is there actually more to it? There are market incentives, “green energy” tax incentives and access to capital markets for going green. Read on for information on getting plugged in and insight from company executives on what their organizations are actually doing to go green.

SUPPORT YOUR CLAIMS & GET CREDIT Many organizations make claims of being green, and companies are staking their reputations on green industries and practices. Now, some are going one step further: getting credit for their green businesses. Credits can take on many forms. These may include government rebates and incentives or credits for carbon offset. Firms are also now working to receive market credit for participating in sustainable business practices. These credits come in the form of membership and certification through a variety of organizations that make it easy and affordable for any individual or business to reduce and offset their climate impact. The organizations allow for branding through certified and verifiable practices and include such groups as Green-e,

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SUSTAINABILITY Carbonfund.org, Voluntary Carbon Standard and Environmental Resources Trust, among others. Certain organizations, such as Carbonfund.org, globally support third-party validated renewable energy, energy efficiency and reforestation projects. According to Carbonfund. org, “the hallmarks of quality carbon offsets are third-party certification standards, verification and auditing.” Companies are backing up their claims through participation in certification and verification programs. Verifications often take the form of agreed-upon procedures to ensure that the entity making the claims meets specific standards. Green-e is an independent consumer protection program that offers certification and verification of renewable energy and greenhouse gas mitigation products. Green-e requires third-party verification in certain areas. Just as the ISO 14001 standards under the International Organization for Standardization (ISO) have become a significant business certification, we expect the marketplace to begin to demand that companies back up their claims through certification with respected entities. Many top-name companies are getting ahead of the curve and becoming certified.

SECTOR STIMULUS WITH CREDITS & INCENTIVES There have been extraordinary developments in the cleantech sector in recent years. “Cleantech” is a broad term that applies to a very diverse industry; it includes renewable energy solutions, technologies for efficiency products, carbon capture and sequestration, water issues, agriculture, smart grid, fuel cells and much more.

Driven by a combination of long-term energy policy and recent stimulus initiatives, federal and state governments are now providing qualifying companies with unprecedented tax credits and other incentives to support investment, development and growth. Unfortunately, only a fraction of eligible companies are aware of the full extent of these incentives, which include: FEDERAL AND STATE R&D TAX CREDITS:

Tax credits are available for companies developing or improving their products, manufacturing processes, software or certain techniques used in providing services. All industries are eligible and can currently claim Research & Development (R&D) Tax Credits under Internal Revenue Code Section (IRC Sec) 41. Some cleantech sectors benefiting from R&D credits include alternative and renewable technologies, power generation and storage, transportation and biotech. For activities in California, these credits can be significant; up to as much as 14 percent of every qualified $1 spent.

ENERGY EFFICIENT COMMERCIAL BUILDING DEDUCTION:

A business that builds or remodels a facility using efficient lighting, heating/ cooling system (HVAC) or building envelope may be eligible for accelerated tax depreciation of the investment using the Energy Efficient Commercial Building Deduction as prescribed by IRC Sec 179D. An accelerated tax deduction of as much as $1.80 per square foot of facility space may be available, with eligibility standards within range of most organizations. RENEWABLE ENERGY PRODUCTION TAX CREDIT (PTC):

Under IRC Sec 45, a business that produces energy from renewable sources may be eligible for a federal tax credit, including energy produced from wind, geothermal, solar or solid waste sources. Certainly, utility companies that produce renewable energy can benefit from this credit. Other businesses producing electricity from these sources for their own use, but which also sell excess energy back to “the grid” during off-peak usage periods, may also be eligible. 

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SUSTAINABILITY “We’ve assisted a significant number of clients in deployment of investment and production credits as an important component of their overall decision to invest in facilities and equipment,” said Matt Becker, partner and national leader of BDO USA, LLP’s green energy tax services group and cost segregation team. Becker detailed an engagement in which “one client, a $500 million manufacturer, was looking to reduce their energy costs and installed a solar panel system on the roof of a facility. The client was able to capture a $400,000 tax credit for installing the solar equipment.” BUSINESS ENERGY INVESTMENT TAX CREDIT (ITC):

For businesses that produce energy from sustainable and renewable sources but find selling energy to the grid overly onerous or impractical, the Business Energy ITC is an important opportunity. IRC Sec 48 provides a tax credit for between 10 and 30 percent of the amount initially invested in equipment used to produce energy from a sustainable and renewable source. “We saw a scramble in the fourth quarter by many developers to get their renewable energy projects off the ground,” said Tom Tullidge, co-managing director of Cary Street Partners. Tullidge emphasized that “to qualify for the federal ITC, these projects must have been under construction or have spent 5 percent of development costs by December 31.” GREATER FLEXIBILITY AND MONETIZING CREDITS:

Many recent changes have been enacted to help cleantech companies navigate the current challenging financial climate, such as Refundable R&D and Alternative Minimum Tax Credits. A refundable

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tax credit is a rare feature of the Code because it permits a taxpayer to receive cash from the Internal Revenue Service even if it has no taxable income, no tax liability and no payments of estimated tax. Some early-stage companies still in Net Operating Loss (NOL), but were active in investment and development prior to 2006, may be able to identify and monetize old R&D credits as cash. Another example of greater flexibility and support relates to certain qualifying renewable electricity production projects that can now choose either a 30 percent ITC or a 30 percent cash grant in lieu of the PTC. Qualifying renewable projects include wind, solar, geothermal, biomass, solid waste and certain hydropower, marine and hydrokinetic energy facilities. Seth Ginther, a government affairs and regulatory lawyer with Hirschler Fleischer, said, “We have seen over the past couple of years that if you know where to look and how to navigate through the system, there is an opportunity to finance your renewable energy project with up to 50 percent of government grants.” “This has been an enormous boon to the renewable energy industry,” Ginther said, citing an example in which “the Virginia Tobacco Commission has set aside $100 million in research and development grants for renewable energy. This past spring we successfully lobbied the tobacco commission for a portion of those funds for two different client projects totaling several million dollars.”

ACCESS TO CAPITAL MARKETS Companies need different volumes of capital to finance growth and operations, depending on where they are in their

SUSTAINABILITY overall life-cycle. Cleantech companies operate in a very diverse market — making it difficult to generalize — but there are certainly plenty of companies in the United States in the start-up phase. These early-stage companies often need a combination of government money and either “angel” investors or venture capital financing before they scale up operations. The next stage, either private equity financing or public equity markets, enables companies to further ramp up their operations to the point of revenue generation — allowing them to mature and likely gain access to debt markets. Market demand has led many venture capital and private equity firms to either focus exclusively in, or have divisions specializing in, cleantech portfolio companies and target investments.

in initial public offerings as companies try to tap into this valuable, traditional source of finance. The Cleantech Group issued reports showing “global venture investment totaled $2.1 billion across 189 deals” in Q1, 2010; “maintained its momentum in Q2, 2010, hitting a new high since the beginning of the financial crisis;” before cooling off “30 percent compared to the previous quarter” in Q3, 2010. “Cleantech, along with biotechnology and medical devices, remains one of the leading sectors for venture investments,” according to Tullidge. “After taking a more defensive posture in 2009, venture funds now have significant reserves of dry powder that they must put to work.

Consequently, 2010 is shaping up to be a record year for cleantech venture investment; on pace to surpass even the highs of 2008.” Roderick Simmons, a mergers & acquisitions (M&A) attorney with Hirschler Fleischer, echoed some of Tullidge’s comments and views the emerging focus on cleantech investment with optimism. “For much of late 2008 and 2009, traditional M&A activity was curtailed as a result of the market downturn,” Simmons noted, “but the level of investment and acquisition activity we saw in the cleantech sector in 2009 and 2010 was, and continues to be, remarkable, and there is no indication that things will slow down in 2011 and beyond. As a lawyer, it’s exciting 

Preliminary figures for 2009 indicate a one-third reduction in new investment worldwide as a consequence of the tightened credit market and the recession; however, the cleantech sector was by far the largest arena to receive venture capital funding. According to the Cleantech Group, cleantech entities received $5.6 billion of venture capital funding in 2009. Further, in the United States, 72 percent of venture capital investment was in cleantech, with solar taking the lead followed by transportation. The loan guarantees provided by the American Recovery and Reinvestment Act of 2009 were starting to come through toward the end of 2009 and are therefore only now providing financing support. Federal Treasury grants have helped to fill the void left by the absence of capital from lenders. Although the public markets have by no means fully recovered, we are starting to see an uptick

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SUSTAINABILITY to be working with companies that are involved in building new industries and jobs for the U.S. economy, improving the environment and putting the U.S. on a path toward energy independence.” Amersco, Amyris, A123 Systems, Sensata, Energy Recovery, Codexis and Tesla Motors are just some of the cleantech IPOs that have taken place in the past two years and there are many others, including numerous Chinese companies. Going public can be critical to a company’s success, yet getting there can be a daunting process. Although the advantages and disadvantages of going public are beyond the scope of this article, it is safe to say that an IPO that provides additional capital, an exit strategy for early-stage investors and tradable capital for mergers and acquisitions is a goal of many entrepreneurs.

MARKETPLACE INITIATIVES To determine what companies are doing in the cleantech sector and perhaps why, we reached out to a number of C-suite executives, both inside and outside the green sectors. Worth Bugg, a project engineer at commercial contractor KBS, has seen a shift in client preferences. KBS sees “environmental aspects as part of the design of almost every commercial building” we do, according to Bugg. A recent building included window designs that took into account the sun angles and minimized the building’s energy usage for heating and cooling. Another example provided by Bugg was a “high school that included fountains fitted to fill water bottles that promoted refilling, as well as the health aspect of drinking water instead of soft drinks.”

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Charles Valentine, partner at Eastlight Renewable Ventures, sees significant growth in the number of “companies, universities and Real Estate Investment Trusts that are implementing on-site renewable energy. Attractive project economics as well as increasing expectations from their customers, constituents and tenants that they should be active contributors toward energy and climate solutions is driving that growth.” The sector is also benefitting from “the wide acceptance of the third-party power purchase agreement financing structure for renewable energy projects [that has] expanded the number of viable projects exponentially, while also creating a new asset class for financial institutions and high net-worth investors,” Valentine said. Smithfield Foods, Inc. goes through great pains to ensure its sustainability programs are compliant to maintain certification under the ISO 14001. Dennis Treacy, chief sustainability officer and senior vice president of corporate affairs, says it’s not easy for a large company to go green, and it requires a multi-year effort. Many Smithfield Foods customers come in with an environmental checklist of questions, and “the company has developed a comprehensive sustainability and socially responsible policy and program that covers environmental management, animal welfare, employee safety and wellness, food safety and community activity,” Treacy said. Tracy Turner, vice president of corporate tax at Smithfield Foods, said it’s appropriate to say that “Smithfield is environmentally friendly because it’s the right thing to do in order to be a good corporate citizen — and customers and employees expect it.” The tax credits “enticed them for five or six years on

SUSTAINABILITY some initiatives, primarily utilizing IRC Sec 40 (alcohol mix); IRC Sec 40A (bio-diesel mix); and some IRC Sec 45 (renewable energy), but over time the company decided that these were not core businesses and exited those businesses as a result,” Turner said. Dominion Resources has a multi-pronged attack “to be a responsible steward of the environment — in generating electricity; transmitting and distributing electricity and gas; constructing power stations and pipelines; and managing facilities and company vehicles,” according to William C. Hall Jr., vice president of corporate communications and community affairs. Hall noted that Dominion is committed to meeting Virginia’s renewable energy target of 15 percent by 2025 and North Carolina’s of 12.5 percent by 2021. Whenever renovation and construction projects are approved, the company “takes LEED requirements into consideration,” such as when they constructed a LEEDcertified green administrative building with energy use at 30 percent lower than conventional structures of the same size. But Dominion is also cognizant of “using the guidelines to make individual decisions on what is best for the company and its customers,” Hall added. At Dominion, incentives “did play a role in the decision to move forward with certain renewable energy projects. Likewise, the biodiesel tax credit of $1 per gallon kept the cost of biodiesel in line with that of standard diesel fuel, and played a significant role in our ability to implement the use of biodiesel in our vehicle fleet,” Hall stated. He also said that Dominion has “utilized the Renewable Energy PTC and the Business Energy ITC, and has sold Renewable Energy

Certificates into the market, all (of which) have been generated from our renewable energy facilities.”

THE FUTURE OF GREEN Several themes seem clear in the cleantech marketplace. Cleantech and going green apply as much to traditional corporations as they do to those companies specifically focused on developing new technologies in this area.

and employees, but projects may be more limited in scope. In any event, we should expect to see major initiatives and breakthroughs in the cleantech sector for years to come. n

DENNIS DIERSEN, CPA is a tax partner and tax business line leader at BDO USA, LLP, in Richmond. BDO provides assurance, tax, financial advisory and consulting services. Contact him at ddiersen@bdo.com.

Cleantech is a fledgling industry that appears destined to grow rapidly for years to come, but probably still needs government incentives until the economics of projects can stand on their own. Without a ROI, companies will still make major efforts to go green due to expectations from customers, regulators

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DISCLOSURES

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JANUARY/FEBRUARY 2011

INTERNATIONAL taxation

DISCOVERING IC-DISC:

Export Tax Incentive Equals Significant Savings BY OLAF BARTHELMAI, CPA

DISCLOSURES

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JANUARY/FEBRUARY 2011

INTERNATIONAL taxation

Many exporters

have never heard of the

Interest Charge Domestic International Sales Corporation (IC-DISC) and do not use it, partly because tax advisors are often unfamiliar with the benefits, qualifications and operational requirements. This article aims to explain and simplify the IC-DISC benefits to make them more accessible to exporters. Generally, any profitable taxpayer who exports at least $1 million in products manufactured, grown or extracted in the United States, or even less with high profit margins, should consider using an IC-DISC. Many taxpayers do not realize they qualify because they export only indirectly by selling to a U.S. distributor or another domestic customer who then exports their product. But in most cases the exporter knows or suspects that their product is being exported, which would enable the utilization of an IC-DISC. And since the enactment of the American Jobs Creation Act of 20041, taxpayers can take advantage of the 15 percent capital gains rate on dividend distributions, which provides a permanent tax benefit of 20 percentage points compared to the highest individual tax rate, and up to 35 percent if the exporter is a dividendpaying C corporation. Taxpayers could save as much as 35 percent on net income from export transactions. So if export sales are $1 million, and the profit percentage2 is 40 percent and the exporter is a C corporation, export profits are $300,000, combined taxable income (CTI)3 is $200,000 and federal tax savings alone is at least $70,000. Usually profits from

export transactions are significantly higher than from domestic sales. Why is this tax benefit so underutilized? In my opinion the reasons range from lack of integration of federal government resources for exporters to complicated technical aspects requiring specialization on the part of tax advisors. I recently attended an export summit in Richmond, Va., that aimed to educate exporters about the many government agencies and services available to help them “go global.” But when I asked a couple of questions about the IC-DISC, it became clear that among the representatives from government agencies, the federal agency representatives from the Small Business Administration and Export-Import Bank

— and even the Chamber of Commerce, all seemed to be oblivious about its existence. The Virginia Economic Development Partnership representative was the only one who was even aware of it. Therefore, I find it not surprising that many exporters have never heard of this benefit.

A HISTORY OF THE IC-DISC The Domestic International Sales Corporation (DISC) was first enacted by Congress in 1971 to encourage U.S. export trade to strengthen the economy. It also aimed to reduce the incentive for U.S. companies to shift manufacturing operations abroad. The DISC provisions were originally enacted to provide a longterm tax deferral on the income earned by a U.S. exporter until it is distributed to shareholders as a dividend. This regime actually permits an indefinite tax deferral to U.S. exporters as long as the DISC earnings are invested in qualified export assets and not distributed to shareholders. Some European countries complained about the DISC regime being an illegal export subsidy that violated the General Agreement on Tariffs and Trade (GATT) from the very beginning. In 1985, the DISC legislation was modified to add an interest charge on shareholders 

EXAMPLE 1

Interest Charge Calculation Accumulated DISC Income (ADI) at December 31, 2009

$100,000

2009 ADI on hand at December 31, 2009

$100,000

Tax on shareholder if distributed

$15,000

Treasury rate for 2009 applicable to DISC

x .6%

Interest charge payable April 15, 2011

$90

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JANUARY/FEBRUARY 2011

INTERNATIONAL taxation for taxes deferred due to the DISC provisions, and a new export tax incentive was created by Congress — the Foreign Sales Corporation (FSC).

UNDERUSED OPTION >>

Many taxpayers do not realize they qualify because they export only indirectly by selling to a U.S. distributor or another domestic customer who then exports their product.

The FSC gained popularity quickly because, although the tax benefit was smaller as a percentage of profits, it was permanent rather than a deferral and it was not limited in size, while the IC-DISC deferral was only allowed on the most profitable $10 million of export sales. From 1985 through 2004, U.S. trading partners succeeded in the World Trade Organization (WTO) in their claims that the FSC and its eventual replacement, the Extraterritorial Income Exclusion (ETI), were considered to be illegal export subsidies. Thus, since 2006 when ETI was phased out, the only export tax incentive that has remained in effect is the IC-DISC. Since 1985, owners of an IC-DISC must pay interest to the U.S. Department of the Treasury on the deferred tax of the undistributed earnings. This modification has made the IC-DISC immune to further attacks from the WTO. The IC-DISC is allowed to invest its

EXAMPLE 2 With IC-DISC

Without IC-DISC

Export earnings

$100

Corporate tax @ .35

$(35)

After tax dist.5

$100

Capital gain tax @ .15

$(15)

After tax cash

$85

$50

Tax saving

$35

DISCLOSURES

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JANUARY/FEBRUARY 2011

earnings in the exporter, keeping the additional cash flow in the business if deferral is used, resulting in a low interest rate loan from the U.S. Treasury. Thus, the U.S. shareholder pays an interest charge on its IC-DISC-related deferred tax liability, which equals the difference between the shareholder’s tax for the tax year computed with and without the accumulated IC-DISC income of the U.S. shareholder that has been deferred over the years. See Example 1.

DETERMINING THE BENEFITS An IC-DISC is a C corporation electing this special status and is not subject to U.S. corporation tax. Therefore the IC-DISC is exempt from income tax on commissions earned from the exporter, and the U.S. exporter can deduct the commission expense paid to an IC-DISC on its tax return, resulting in tax savings to the exporter. The federal tax savings can be as much as 35 percent in the case of a corporate exporter that pays dividends, as dividends to its shareholders are taxed at 15 percent just like dividends paid out of the ICDISC, which is generally owned by the same shareholders. Even for flow-through entities, the tax rate differential is still 20 percent because the IC-DISC “converts” regular business income subject to the highest individual tax rate of 35 percent to dividends subject to 15 percent tax. Because of this rate differential, most IC-DISC shareholders currently do not defer income, which offers opportunities for larger exporters to utilize their DISC without limitations on export sales. The IC-DISC commission is calculated either on 50 percent of the combined taxable income from exports or 4 percent of qualified gross export receipts, or the arm’s-length amount determined under

INTERNATIONAL taxation the transfer pricing principles of Internal Revenue Code Section 482. Exporters seldom use the transfer pricing principles under Section 482 because the IC-DISC would be required to actually purchase and re-sell the export goods. When IC-DISC pays a dividend to its shareholders, the individual shareholders pay tax on the dividend at the capital gains rate, while a corporate shareholder would pay tax at regular corporate rates. Thus very few IC-DISCs are owned by C corporations, except when the goal is deferral or the corporate structure does not allow individual or flow-through ownership. IC-DISC shareholders are subject to tax on both actual dividend distributions and deemed distributions. Deemed dividend distributions include the two most common items: 1) the commission income earned by the IC-DISC beyond the first $10 million qualified export gross receipts, and 2) 1/17 of the IC-DISC revenue if owned by a C corporation. The IC-DISC became much more attractive to U.S. exporters after the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRA) lowered the capital gains tax rate to 0–15 percent and included dividends. If the U.S. exporter is a passthrough entity, such as an S corporation, partnership or LLC, the tax savings is 20 percent, as the distribution is taxed at the 15 percent capital gains rate rather than the 35 percent ordinary income rate. If the U.S. exporter is a C corporation, the tax savings on the IC-DISC earnings equals 35 percent if the C corporation pays dividends. See Example 2.

QUALIFICATIONS AND REQUIREMENTS In order to take advantage of the tax benefits provided by the IC-DISC,

the U.S. exporter has to satisfy several requirements, and the IC-DISC has to pass some tests to qualify as an IC-DISC. The U.S. exporter has to meet the following requirements: U.S. MANUFACTURING REQUIREMENT: The export property

must be manufactured in the United States. The IC-DISC can serve as a buysell agent or a commission-based agent. Property is deemed to be manufactured within the United States if either 20 percent of its conversion costs are incurred in the United States and there is a substantial transformation in the United States; or the operations in the United States are generally considered to constitute manufacturing. In addition to goods manufactured in the United States, architectural and engineering services for projects located outside the United States also qualify. There are some specific exclusions for certain goods from the definition of export property, so please seek professional advice before assuming all property qualifies. DESTINATION TEST: The export

property must satisfy a destination test, which means it must be held for sale, lease or rent in the ordinary course of business for use, disposition or consumption outside the United States. Property satisfies the destination test if it is sold to a customer in the United States, provided the property does not need further manufacturing by the purchaser prior to export and the property is shipped to a foreign destination within one year. Under this destination test, the purchasers will have to provide the exporter with information showing that the product was exported outside the United States.

MINIMUM OF 50 PERCENT U.S. CONTENT REQUIREMENT: The export

property should have no more than 50 percent of the value of the final product attributable to foreign components. This is to encourage the domestic manufacturer to employ U.S. suppliers.

STRUCTURE REQUIREMENTS AND QUALIFICATION TESTS The basic structure requirements of an IC-DISC are: 1. Domestic corporation 2. Minimum of $2,500 capital 3. Only one single class of stock 4. Files the IC-DISC elections 5. Not a personal holding company QUALIFED EXPORT RECEIPTS TEST:

The test requires that 95 percent of the gross receipts of the IC-DISC be qualified export receipts. Qualified export receipts include commissions from sales of export property, rentals for the use of export property outside the United States and services related to export sales. QUALIFIED EXPORT ASSETS TEST: The

test requires that 95 percent of the assets of the IC-DISC be qualified export assets. Qualified export assets include accounts receivable, temporary investments, export property and producer loans. The shareholders of the IC-DISC have several options on the treatment of the DISC revenue depending on the shareholder objectives and corporate goals. After year one, shareholders can take the dividend of the earned IC-DISC income or loan it back to the exporter as a producer loan and earn a small amount of interest income. After year two, shareholders can take the year one income as dividend or begin deferral. 

DISCLOSURES

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JANUARY/FEBRUARY 2011

INTERNATIONAL taxation If the shareholders’ objective is to receive dividends, all IC-DISC income is distributed after year-end to take advantage of the 0–15 percent capital gains rate. If the goal is to defer income, the shareholders may take only part of the IC-DISC income as dividend and defer the income related to the first $10 million of qualified export receipts. Then, before the last business day of the calendar or IC-DISC’s fiscal year, cash needs to be converted to qualified export assets in order to ensure that the IC-DISC meets the qualified export asset test mentioned above. After investing in the qualified export assets, the ICDISC deferred revenue earns additional interest revenue that is further deferred. As explained in Example 1, the cost of deferral is an annual interest charge at the current U.S. Treasury bill rate on income taxes on IC-DISC revenue deferred more than 12 months. There is no limit on the total amount of deferral or the length of time deferred. The

deferral revenue becomes a low-cost source of funds for the exporter to finance its operations and international sales.

THE FUTURE OF IC-DISC BENEFITS If the favorable dividend tax rates under JGTRA sunset for tax years beginning in 2011, IC-DISC is facing an uncertain future, as many shareholders have become accustomed to the permanent savings the current rate differential provides. If the dividend received by individual shareholders will be subject to tax at ordinary income rates, the “permanent” benefits of an IC-DISC could largely be eliminated. However, deferral benefits will continue indefinitely. Those benefits are similar to the benefits provided by pension plans and other deferral vehicles, but generally much larger and without any “minimum distribution” requirements. Based on the current discussions in Congress at press time, there seems to

EXAMPLE 3

be consensus that the Bush tax cuts, and thus the dividend rate, will stay in place for every taxpayer at least for another year or two, and I note that even before current law, the Obama Administration’s fiscal year 2010 budget proposals would continue some of the tax benefit to IC-DISC non-corporate shareholders with a preferential 20 percent tax rate on dividends. Because the Administration also proposed to raise the highest tax rate back to 39.6 percent, the overall tax benefits should remain relatively unchanged under that proposal as well. n

1 American Jobs Creation Act of 2004 (P.L. 180357) 2 Net income from export transaction or “combined taxable income” (CTI) of an IC-DISC is gross receipts less cost of goods sold less apportioned selling, general and administrative (SG&A). Thus the percentage is CTI/gross receipt. 3 CTI is combined taxable income, IC-DISC terminology for taxable income from export transactions. 4 Assuming no other income for illustration purposes, but also assuming that the 15 percent rate applies rather than the 0 percent rate, which would apply if there was no other income. 5 Assuming other funds are available for distribution, and earnings are not limited to export sales alone. 6 Assuming interest rates will rise again. This was the rate for 2008.

An IC-DISC owned by a C corporation receives commission from the exporter for export sales in year 2010. It earns $840,000 commissions on the best $2 million export sales using the 50 percent of combined taxable income method. The calculation of tax benefit is shown below: IC-DISC earned income

$840,000

Less 1/17 deemed distribution

$50,000

Total income to be retained

$790,000

Tax saving at 35 percent

$277,000

Tax saving in 2010

$277,000 6

Interest rate on one year T-bill in 2011

x 2 percent

Interest charge payable when shareholder 2011 return due (2012)

$5,540

Tax benefit from interest deduction at 35 percent

$(1,939)

Net cost of interest charge

$3,601

DISCLOSURES

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JANUARY/FEBRUARY 2011

OLAF BARTHELMAI, CPA

is with Cherry Bekaert & Holland. He specializes in worldwide tax planning, ICDISC creation and operation, global operation restructuring, expatriate and foreign national returns, overseas dividend repatriation, offshore asset protection, import/export issues and other cross-border business issues. Contact him at obarthelmai@CBH.com.

VSCPA self-assessment Complete this 12-question test and submit to the VSCPA for 1 CPE credit. A 75 percent or better pass rate is necessary to receive credit. Your exam will be graded no later than March 31, 2011. After your exam is graded, you will receive either a certificate of completion via e-mail for your records or an e-mail notification that the 75 percent grade was not met. Submission deadline: February 28, 2011. Exams received after this date will not be graded and your money returned. Cost: $15 for VSCPA members/$30 for nonmembers. Submission Instructions You may submit this selfassessment and make the exam payment online at www.vscpa.com/ January2011DisclosuresExam. You may also circle your answer for each question and mail this paper exam to: CPE Team Virginia Society of CPAs 4309 Cox Road Glen Allen, VA 23060 Fax submissions are acceptable to (804) 273-1741. Name _________________________ Address _______________________ _______________________________ E-mail Address ___________________ Date __________________________ Method of Payment • Check (payable to the VSCPA) • Credit card Credit Card Number _______________________________ Expiration Date __________________ Signature Date

_____________________

_________________________

1. Under Internal Revenue Code (IRC) Section 45, a business that produces energy from renewable sources may be eligible for a federal tax credit for energy produced from: a. Wind b. Geothermal c. Solar d. All of the above 2.The business energy investment tax credit under IRC Section 48 provides for what maximum percentage credit of the amount initially invested in equipment used to produce energy from a sustainable and renewable source? a. 10% b. 20% c. 30% d. 40% 3. According to The Cleantech Group, global venture investment hit a new high since the beginning of the financial crisis during which quarter of 2010: a. Q1 b. Q2 c. Q3 d. Q4 4. According to Dominion Resources, Virginia’s renewable energy target by 2025 is: a. 10% b. 12.5% c. 15% d. 20% 5. What is the most commonly accepted definition of sustainability? a. The quadruple bottom line b. Protecting our environment c. The triple bottom line d. Making money for a long time 6. Which of the below companies is leading sustainability practices? a. Sears b. Burt’s Bees c. Walmart d. McDonald’s

7. Which type of professional should lead businesses in adopting more sustainable business practices? a. Engineers b. Attorneys c. Doctors d. Accountants 8. What is the best reason for making your company more green and sustainable? a. Saving money b. Employee retention c. Positive community impact d. All of the above 9. What modification has shielded the Interest Charge Domestic International Sales Corporation (IC-DISC) from claims of illegality by the World Trade Organization? a. The IC-DISC is not a U.S. company. b. Owners of an IC-DISC must pay interest to the U.S. Department of the Treasury on the deferred tax of the undistributed earnings. c. The IC-DISC does not provide any international trade benefits. d. Owners of an IC-DISC are not required to pay U.S. income tax. 10. What is the maximum percentage a corporate exporter that pays dividends can save by deducting the commission expense paid to an IC-DISC on its tax return? a. 15% b. 25% c. 35% d. 50% 11. An organization cannot be an IC-DISC if it: a. Is a personal holding company b. Files the IC-DISC elections c. Has only one single class of stock d. Employs more than 30 people 12. After what year did the ICDISC become the only export tax incentive in effect? a. 1971 b. 1985 c. 2004 d. 2006

DISCLOSURES

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JANUARY/FEBRUARY 2011

VSCPA news

VSCPA 100% Member Firms VSCPA 100% Member Firms show their commitment to their employees, the profession and the association. A 100% Member Firm is a Virginia CPA firm or company that has all of its CPAs enrolled as members in the VSCPA. Interested in being listed as a 100% Member Firm? Contact VSCPA Member Relations Director Brenda Fogg at bfogg@vscpa.com or (804) 612-9409.

Thank you for your commitment, 100% Member Firms! Anderson & Reed, LLP Beck & Company, CPAs, PC Bennett, Atkinson & Associates, PC BlackHeath Company, PLC Bowling, Franklin, & Co., LLP Boyce, Spady & Moore PLC Britt & Peak, PC, CPAs Cameron, Moberly & Hamrick, PC Charles S. Pearson, Jr., CPA Cocke, Szpanka & Taylor, CPAs, PC Cole & Associates CPAs, LLC Coley, Eubank & Company, PC

Corbin & Company, PC Craver, Green and Company, P.L.C. Creedle, Jones and Alga, PC Dalal & Company David L Zimmer CPA PC Didawick & Knopp, PC Dominion Benefits Donald W. Coleman, CPA, Inc., PC Duvall Wheeler, LLP Elmore, Hupp & Company, PLC Forrest & Markos Frank Edward Sheffer & Company Fritz & Company, PC Garland & Garland, CPAs, PC Garris and Company, PC Gregory & Associates, PLLC Hantzmon Wiebel Harris, Harvey, Neal & Co., LLP Homes, Lowry, Horn & Johnson, Ltd. Honeycutt & McGuire CPAs Jones & Radman, PC Keiter, Stephens, Hurst, Gary & Shreaves, PC Kositzka, Wicks and Company Kuehl Shepherd Kozlowski & Associates, Inc. L. P. Martin & Company, PC Lane & Associates, PC

Larry D. Greene CPA PC Lent & Hawthorne, PC M. Lee Winder & Associates, PC McPhillips Roberts & Deans PLC Michael B. Cooke, CPA, PC Michael R. Anliker, CPA, PC Miller Foley Group Mitchell, Wiggins & Company, LLP Moss & Riggs, PLLC Murray, Jonson, White & Associates, Ltd., PC PBGH Roger L. Handy, PC Rubin, Koehmstedt & Nadler, PLC Rutherford & Johnson, PC Sells, Hogg & Jones, CPAs, PC Spencer, Hager & Mosdell, PC Stephen Merritt CPA, PC Steve Guy & Associates, PC Strickland & Jones, PC Sullivan, Andrews & Taylor PC Swart, Lalande & Associates, PC Terry L. Jones, CPA, LLC Thomas E. Fraley, CPA Thompson, Greenspon & Co., PC Updegrove, Combs, McDaniel & Wilson, PLC Valderas & Fishel, PC Walker Consulting Group Wall, Einhorn & Chernitzer Wells, Coleman & Company, LLP

The above list was compiled November 1, 2010. Check www.vscpa.com/100Percent for a complete, up-to-date list.

Give Back to Get More >>

VSCPA CPE & NETWORKING: GET IT ALL ONLINE

Volunteer now

Visit the CPE Catalog at

Participate in the VSCPA volunteer program for the 2011–2012 membership year by signing up online by Friday, January 21, 2011. (Site login required.) Visit www. vscpa.com/Volunteer to check out a host of opportunities, including committees and task forces, community service programs, legislative programs, speaking and writing opportunities and more. n

www.vscpa.com/CPE for the latest VSCPA seminars, conferences, webcasts, networking events and more.

DISCLOSURES

•

Get involved to get the most from your membership experience. The VSCPA offers more than 30 volunteer opportunities to use your skills and make a difference. Plus, we need the advice and expertise of our members to create benefits and programs that meet our members’ needs and act on behalf of the CPA profession in Virginia.

JANUARY/FEBRUARY 2011

VSCPA news Cream of the Crop >>

Virginia license candidate earns top CPA Exam score The American Institute of CPAs (AICPA) has announced the 2009 Elijah Watt Sells Awards, and Virginia license candidate Michelle Burket is on that elite list. The awards are presented annually to the 10 candidates earning the highest cumulative scores on the four sections of the computerized Uniform CPA Examination. Burket attended the University of North Carolina at Chapel Hill for both her

undergraduate degree and graduate degree. She has been working at PricewaterhouseCoopers in Maryland for a little more than a year and is now an associate in the assurance practice. “Originally, I considered accounting as a possible career choice since my math skills and attention to detail made it a natural fit,” Burket said. “I later decided to pursue becoming a CPA after learning more about the many different types of accounting jobs and about the variety of

organizations that use accountants. I felt that being a CPA would allow me to have an interesting and challenging career.” Now that she is no longer studying for the Exam, she enjoys cheering for the Redskins, Capitals and Tar Heels and spending time with my family and friends. “I am also planning my wedding for next fall!” n

VSCPA named among 2011 Best Places to Work in Virginia The Virginia Society of Certified Public Accountants (VSCPA) was recently named as one of the 2011 Best Places to Work in Virginia. The annual list of Best Places to Work was created by Virginia Business magazine and Best Companies Group. This survey and award program was designed to identify, recognize and honor the best places of employment in Virginia, benefiting the state’s economy, its work force and businesses. The Best Places to Work in Virginia list is made up of a total of 50 companies, split into three groups based on size. The VSCPA has been named one of the Best Places to Work in Virginia in the small employer category.

demographics. The second part consisted of an employee survey to measure the employee experience. The combined scores determined the top organizations and the final ranking. Best Companies Group managed the overall registration, survey and analysis process and determined the final rankings.

Organizations from across the state entered the two-part survey process to determine the Best Places to Work in Virginia. The first part consisted of evaluating each nominated company's workplace policies, practices, philosophy, systems and

The ranking of the first-ever Best Places to Work in Virginia will be unveiled and published in the February 2011 issue of Virginia Business magazine. For more information on the Best Places to Work in Virginia program, visit www. BestPlacesToWorkVA.com. n

DISCLOSURES

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JANUARY/FEBRUARY 2011

VSCPA news At left, John Swart and his wife sit next to Luke Lalande, standing, at Lalande’s retirement party on October 1, 2009.

Peace of mind? Piece of cake Insurance is peace of mind. That’s why the VSCPA offers various exclusive insurance options — to enhance members’ security. In addition to its current insurance offerings, the VSCPA has added two new programs just for members: DISCOUNTED LONG-TERM CARE INSURANCE PROGRAM

The VSCPA has partnered with LTC Global to provide a discounted longterm care insurance program for VSCPA members and their families. The program includes premium discounts for VSCPA members and eligible family members, including spouses, parents and grandparents. It provides important protection should plan holders need care at home or in an assisted living or nursing home facility. The program also provides special discounts not available to the general public. LIFE INSURANCE PROGRAM

The VSCPA Insurance Service Center offers an exclusive voluntary life insurance program to VSCPA members and their firms. These unique benefits are offered through Boston Mutual and include guarantee issue amounts (no medical underwriting) up to $100,000. n

Check out all of the VSCPA’s insurance options at www.vscpa.com/Insurance.

DISCLOSURES

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Firm News >> Councilor, Buchanan and Mitchell, PC, of Bethesda, Md., fielded

two teams in the 2010 Bethesda Walk and Ride Challenge, September 6–26. The firm also had three employees participate in the 27th Annual Make-A-Wish Triathlon at Sea Colony, Del., on September 25, 2010. Sherwood H. Creedle, CPA, and Glenn E. Barbour, CPA, have formed

the CPA firm of Creedle and Barbour in South Hill. Fairfax CPA firm Swart, Lalande & Associates PC celebrated its 50th anniversary in 2010. The firm was founded in 1960 by VSCPA life members John F. Swart, CPA, and Luke J. Lalande, CPA, who joined the firm two years later. VSCPA Staff News >> Two employees mark 11 years with the VSCPA this year: Graphic Designer Jen Syer on January 9 and Vice President of Member & Public Relations Tina Lambert, CAE, on February 7.

Programs Manager Lydia Sartori celebrates three years on January 15, and Vice President of Strategy & Development Amy Parker marks 17 years on February 17. PAMELA ROBERSON celebrated one year

with the Society September 14.

Jenny Hansen, former VSCPA

communications manager, has been promoted to communications director. She also celebrates five years with the Society on January 9. Congratulations Jenny! Jill Edmonds has left her current

position as VSCPA communications director, but remains managing editor of Disclosures. You may still contact her at jedmonds@vscpa.com. JANELLE MILLER-SMITH is no longer

with the VSCPA. We wish her luck.

The VSCPA welcomes Communications Specialist CHIP KNIGHTON, who began December 13, and Marketing Consultant STEPHANIE MADDOX, who began December 14. Welcome to the team! n

The VSCPA mourns the loss of: Winfrey R. “Buck” Brooks Jr., CPA, of Midlothian. A 1967 graduate of Virginia

Commonwealth University, he worked for more than 25 years at General Services Corporation. Peter E.R. Dickinson, CPA, a sole proprietor in Charlottesville. He was a 1972 graduate of the University of Virginia School of Commerce. John E. Greunke, CPA, of Newport News. He served in the U.S. Army in the 1940s and was retired from his own firm, Greunke and Co., PC. n

JANUARY/FEBRUARY 2011

VSCPA news

Congratulations to the following members! NEW HIRES >> Robert L. Cherry and Chama T. Elliott are new staff accountants at

Swart, Lalande & Associates, PC, in Fairfax. Homes, Lowry, Horn & Johnson, Ltd., a CPA firm in Fairfax, has hired new

staff accountants: Gregory Cooke, Kara O’Donnell, and Cassidy Rupp. Promotions >> At Wall, Einhorn & Chernitzer PC, in Norfolk, promotions include Gary Baum, CPA, to leader of the business valuation and litigation support team; Patricia A. Blue, CPA, to leader of the construction team; Holly M. Bodner, CPA, to senior accounting and audit accountant; Joanna G. Brumsey, CPA, to leader of the manufacturing, distribution and retail team; David M. Chase Jr., CPA, to senior tax manager; Richard E. Groover, CPA, to accounting and audit supervisor; Eileen C. Gwaltney, CPA, to leader of the government contract services team; Angela R. Kerns, CPA, to leader of the real estate services team; and Julie L. Sokolowski, CPA, to leader of the nonprofit services team.

Petersburg office of Mitchell, Wiggins and Company are Rachel L. Finton and Michelle T. Vaughan, CPA. Ty W. Kehrer, CPA, and T. Sean E. Rogstad, CPA, have been promoted

to senior managers at Swart, Lalande & Associates, PC, in Fairfax. Promotions at Goodman & Company, LLP, in Virginia Beach include Yelena B. Laratta, CPA, to supervisor and Melissa M. Weigle to senior associate. Appointments & Awards >>

Lovelace, CPA, president of Lovelace,

Norvelle, Mathews & Crews, PC, in Lynchburg, received a silver medal in the “CPA” category of the 2010 Bedford Bulletin’s Reader Choice Awards. Barry G. Slaughter, CPA, retired in Bedford, received a bronze medal. Ronald L. Mittelman, CPA/ABV, CVA, CFF, president of Locust Hill

partner at Bennett, Atkinson & Associates, PC, in Manassas, was elected to the 2010–2011 Prince William Chamber of Commerce Board of Directors. Carrie B. Campbell, a student at

John J. Renner II, CPA, owner of

Bridgewater College, received the David E. Will Endowed Scholarship Fund for the Support of Public Accounting for the 2010–2011 academic year. Martha S. Cooper, CPA, a sole

proprietor in Martinsville, was named to the Piedmont Arts Association Board of Directors. Hope A. Cupit, CPA, president/CEO

Hyde & Barbour in Richmond, and Bobby Stakes, CPA, was promoted to senior accountant in the firm’s Culpeper office. Promoted to senior accountants at the

VSCPA life member Ronald L.

CVA, has been named principal at Yount,

T. Sean E. Rogstad, CPA

Consulting Services, LLC, in Keswick, has been named treasurer of the Board of Directors for the National MS Society’s Blue Ridge Chapter, which covers most of Virginia, West Virginia and some of Kentucky.

Debbie J. Bennett, CPA, managing

of the Southeast Rural Community Assistance Project in Roanoke, was named by Gov. Bob McDonnell to the Board of Directors of the Virginia Birth Related Neurological Injury Compensation Program.

Alexander D. Eccard, CPA/ABV,

Alex D. Eccard, CPA/ABV, CVA

Renner and Company, CPA, PC, in Alexandria, chaired for the third time the Rotary Club of Alexandria’s Taste for Giving fundraiser on October 22, 2010. The event raised money for 30 different local charities. Daniel L. Shaw, CPA, a sole proprietor

in Vienna, received the “Citizen of the Year” award during the ViennaTysons Regional Chamber of Commerce’s 2010 Service Awards dinner. Wise County Treasurer Delores W. Smith, CPA, was named Treasurer of the Year by the Virginia Treasurers’ Association. n

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JANUARY/FEBRUARY 2011

VSCPA educational foundation

Virginia Tech students benefit from Accounting Doctoral Scholars program Dakota and Texas, and she is a Certified Fraud Examiner. With hopes of one day becoming an accounting professor at a major research university, Garcia plans to focus her studies on taxation. “Taxation is a challenging and constantly changing field,” Garcia said. “I want to be a professor so I can contribute to the body of knowledge in the field, and also help prepare future generations of students to work in public accounting.” Garcia worked for five years as a tax consultant with Deloitte Tax, LLP, in Raleigh, NC, specializing in individual and pass-through entity taxation. She is licensed as a CPA in North Carolina. Great CPAs are often the product of great educators. That’s why the VSCPA and VSCPA Educational Foundation pledged a combined $25,000 over five years to the Accounting Doctoral Scholars (ADS), which aims to address a growing crisis at the nation’s colleges and universities — a lack of academically qualified accounting faculty that threatens the pipeline of tomorrow’s accounting students. And some local Virginia students directly benefitted from that contribution this year. Virginia Tech students Kathryn Enget, CPA, and Joanna Garcia, CPA, were selected as 2010 ADS scholars by the American Institute of CPAs (AICPA) Foundation. Enget plans to specialize

DISCLOSURES

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in auditing and information systems, with the ultimate goal of teaching at the college level. Enget and Garcia both began Virginia Tech’s accounting Ph.D. program in fall 2010. “I originally started looking at accounting as a possible career path because of my grandmother,” Enget said. “She was a bookkeeper at a Seattle law firm and always seemed to love her job and role in the firm’s success. Once I got to college and started taking the courses, it seemed like a natural fit.” Enget worked for more than six years in public accounting, specializing in the forensic, audit and tax areas, including four years in the forensic practice at a Big Four firm. Enget’s primary area of expertise is proactive forensic data analysis. She is licensed as a CPA in South

JANUARY/FEBRUARY 2011

In all, 70 firms and 48 state CPA societies have pledged a total of $17 million to the ADS program since it launched in 2008. The program provides funding for up to 30 individuals each year, with a focus on those currently working in public accounting, to help them make a permanent transition to teaching and research in accounting at the university level. The funding supports applicants to doctoral programs in accounting and also provides an annual stipend of $30,000 for up to four years of enrollment. Priority is given to those committed to teaching and research in audit and tax — the areas of greatest need. A full description of the program, complete eligibility requirements, application procedures and a current list of participating universities are available at www.adsphd.org. n

Fundraising the bar Establishing a named accounting scholarship through the VSCPA Educational Foundation takes a $50,000 gift and a passion for accounting education. But what happens once a firm, company or individual makes that $50,000 pledge? Organizations are really rolling up their sleeves to raise funds, showing true commitment to their cause. Murray, Jonson, White & Associates, for example, pledged $50,000 in honor of its 50th anniversary in 2009. To meet that goal, the firm mailed letters, worked with clients and colleagues and actively spread the word about the Foundation’s mission — a successful game plan. The first scholarship will be awarded for the 2011–2012 academic year. The latest firm to take fundraising into

its own hands is Witt Mares, which is actively promoting the Mares Scholar Fund in honor of the firm’s co-founder and partner Michael E. Mares, CPA, who passed away in 2009. Witt Mares established the Mares Scholar Fund to inspire and develop the next generation of leaders to carry on Mares’ exceptional life work. To help with its fundraising efforts and also offer a fitting tribute to Mares, the firm launched a special section of its website, www.wittmares.com/ company/mares-scholar-fund.htm, where contributors can learn about Mares’ legacy and make a donation. Check out all of the Foundation’s named scholarships at www.VSCPAFoundation. com and learn more about ways you can get involved. n

Calling Star Students

Spread the word: The deadline to apply for the VSCPA

• Cocke, Szpanka & Taylor Annual Scholarship ($2,500)

Educational Foundation’s 2011–2012 accounting scholarships is

• Wall, Einhorn & Chernitzer Annual Scholarship ($2,500)

January 10, 2011.

• H. Burton Bates Jr. Annual Scholarship ($1,750)

Each year, the VSCPA Educational Foundation awards thousands of dollars in scholarships to deserving accounting students just like you. This year, we’re offering even more scholarships to help finance future CPAs’ education: • Undergraduate Accounting Scholarship (multiple $1,000) • Minority Accounting Scholarship (multiple $1,000) • Graduate Accounting Scholarship (multiple $1,000)

• F. Wilson Brown Accounting Scholarship ($2,500) • Murray, Jonson, White & Associates Annual Scholarship ($2,500) Visit www.VSCPAFoundation.com to download a complete scholarship package, including an application, description of each scholarship, eligibility requirements and an application checklist.

• Ph.D. Accounting Scholarship ($2,500)

All scholarship applications and supplemental materials must

• Goodman & Company Annual Scholarship ($2,500)

be submitted to the VSCPA Educational Foundation, 4309

• Thomas M. Berry Jr. Annual Scholarship ($2,500)

Cox Road, Glen Allen, VA 23060, postmarked no later than

• Yount, Hyde & Barbour Annual Scholarship ($2,500)

January 10, 2011.

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JANUARY/FEBRUARY 2011

Introducing .... The new and improved VSCPA.com! Clear, concise, easy to read. These are just a few adjectives we hope you’ll think of when you begin using the newly redesigned VSCPA website at www.vscpa.com.

New & improved login

Main topic areas expand for easy browsing

As the final piece of the VSCPA’s recent rebranding project, the VSCPA website now matches the new look of the Society’s communications — simple and memberfocused. While the site still contains all of the robust features you’ve come to expect, such as the searchable CPE Catalog, CPE History tool and more, it’s now packed with more news and information than ever.

Find all of your membership benefits here

Pssst … If you haven’t yet created a new website account, make sure you visit www.vscpa.com and click on “Create New Account” in the upper right corner. This allows you access to all of the site’s members-only features. AND, if you created a new account since February 8, 2010, on the old site, your information is still up-to-date and you’re good to go.

CPE quick search

CLASSIFIED ads Growth, sales & acquisitions ACCOUNTING PRACTICE SALES Selling? Contact Brannon Poe, CPA at (888) 246-0974 or poe@knology.net. We can help you: • Maximize the value of your practice • Experience a simple and straightforward process • Achieve confidence that your clients will be in good hands Featured Listing: (See all of our available listings at www.accountingpracticesales. com.) Middle Peninsula — $915,000 Very well-established CPA practice with excellent cash flow to owner. This is a strong practice in every respect, and located near the Chesapeake Bay, home of the Governor’s Cup, one of the oldest sailing regattas. If you like sailing or boating, this is the place to be! The practice has talented, long-term staff

and great clients in a variety of businesses. The minimum 1040 fee is $350, with an average 1040 fee of approximately $700. No audit work. This is an exceptionally good opportunity! Donovan & Palmer Northern Virginia CPA seeks to associate with energetic CPA who is interested in the eventual takeover of the practice. Strong technical skills in both reporting and tax a must. Ideal candidate will be individual who is committed to working in public accounting and has started their own practice. Respond with resume and cover letter to: CPA, PO Box 10712, Burke, Virginia 22009.

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JANUARY/FEBRUARY 2011

I AM the vscpa

HOPE CUPIT, CPA>>

Last year, Hope was named by Gov. Bob McDonnell to the Board of Directors of the Virginia Birth Related Neurological Injury Compensation Program.

All about service >>

Two minutes with Hope Cupit, CPA Hope Cupit, CPA, has devoted her life to getting rural communities in Virginia and other eastern states tapped in to clean water. She serves as president and CEO of the Southeast Rural Community Assistance Project, Inc. (Southeast RCAP), which promotes the development of affordable water and wastewater facilities, activities and resources to improve the quality of life for low-income rural residents. “I work for a nonprofit organization that assists many people who oftentimes find themselves helpless,” she says.

wastewater facilities to more than 450,000 residents in its seven-state network: Delaware, Maryland, Virginia, North Carolina, South Carolina, Georgia and Florida. Hope is certain that being a CPA has helped her achieve the organization’s mission. “I know that my ethical oath to the CPA profession has translated to my work with Southeast RCAP,” Hope says. “I like being a CPA because I am constantly reminded that I provide a service to the public.”

Through grants and loans to low-income individuals and communities, Southeast RCAP has brought clean water and

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JANUARY/FEBRUARY 2011

I AM PASSIONATE ABOUT… Serving

those less fortunate than me. PEOPLE DON’T KNOW THIS, BUT… I

love to read Greek mythology. IF I WEREN’T A CPA, I WOULD BE… A

psychiatrist. I WISH CPAS KNEW… That having fun

will take the stress out of life. WHEN I TOOK THE CPA EXAM… I was

eight months pregnant and miserable. I NEVER LEAVE HOME WITHOUT… My

coffee in hand. I AM A CPA BECAUSE… I love being the

backbone of the organization.

Ready for a change of scenery? go with the leader. we have qualified buyers waiting. see detailed articles about the process on our website!

virginia Practice — Featured Listing Middle Peninsula, $915,000 Well established CPA practice with excellent cash flow to owner. The practice has talented, long-term staff and great clients in a variety of businesses. The minimum 1040 fee is $350, with an average 1040 fee of approximately $700. No audit work. This is an exceptionally good opportunity! BRANNON POE, CPA | 1.888.246.0974 | POE@KNOLOGY.NET

dc Metro Practices Montgomery County CPA Firm – $582,060 Highly profitable CPA practice provides a mix of 43% tax, 49% accounting and 8% other services to individual and small business clients. The prime location and established reputation of this practice make this a solid opportunity for many types of buyers. Silver Spring CPA Firm – $282,298 Established CPA practice has experienced tremendous growth in the past 4 years. The owner has implemented a highly profitable service model, and the practice is showing over 50% in owner’s discretionary cash flow! DEREK LEROUX | 1.866.850.6565 | DEREK@ACCOUNTINGPRACTICESALES.COM

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Accountants Address service requested

Collaborate with the Experts For Projects Requiring Specialized Expertise or Independence

Financial Investigations

Valuation

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• Financial Reporting • Tax - Estate, Gift, Income • Transactions - Mergers and Acquisitions, Fairness Opinions • Stock Based Compensation • Buy/Sell Agreements • ESOPs • Divorce

Employee Embezzlement Management Fraud Investment Scams Vendor/Customer Fraud Computer Forensics

Litigation • • • • • • • • •

Shareholder/Partner Disputes Breach of Contract Business Interruption Divorce Intellectual Property Infringement Post-Acquisition Disputes Securities Tortious Interference Wrongful Termination

Harold G. Martin, Jr., CPA/ABV/CFF, ASA, CFE Principal-in-Charge of Business Valuation, Forensic and Litigation Services

804.273.6240 HMARTIN@KSHGS.COM

• • • • • • • •

25 years of experience and specializes on full-time basis Significant experience in working collaboratively with local, regional and Big Four firms Supported by team of full-time specialists Expert witness in federal and state courts and court-appointed neutral Adjunct faculty for William and Mary Mason Graduate School of Business Instructor for AICPA National Business Valuation School and ABV Exam Review Course Co-author of Financial Valuation, 3rd ed. Contributing author to Cost of Capital, 4th ed., Workbook and Technical Supplement