Welcome to this issue of The Bookkeeper's Notes newsletter which focuses on current news and good bookkeeping practices.
As fall becomes a reality where we begin to don sweaters in the morning while wrapping our hands around a hot cup of tea, and peal them off in the afternoon ... I hope you stop and take a break ... enjoy a cup of tea, smoothie, coffee, meal replacement drink, water ... or a favorite beverage of your choice while you lazily browse through this newsletter.
One of the things I promote is to take a 15 minute tea break with this site a few times a week ... even if you don't understand everything you are reading. Absorbing the information in small bits will help it sink in that brain of yours. In three to six months, you'll find you are starting to "get it".
I also designed the site to be an ongoing resource for YOU ... to visit again and again and again ... when you need to look something up. I know there are a lot of pages and the chats/notes are detailed ... there is a reason for that.
These are my notes that I refer to regularly. I add to them as I learn more during courses, work on client files or keep current through my many newsletters and subscriptions. I often use the search box to find what I'm looking throughut the day.
This issue is going to discuss IASB's definition of assets and liablities and proposed changes to the definition. If you are a U.S. business owner, be sure to check out the IRS news for updates to minimum health care coverage requirements.
Earlier this month, I went on a three hour kayak trip down the Columbia River (from Invermere to Radium Hot Springs). Here I am coming in at the take-out spot after three hours of lazy paddling.
I made the trip with a group of ladies; guided by Columbia River Kayak and Canoe Outfitters out of Invermere. We were transported back to base where we were served snacks and beverages. It was an excellent adventure.
I'd be remiss if I didn't mention that the next day I skedaddled to Bare Hands Day Spa in Radium Hot Springs for a massaage to relax my aching muscles.
The trip and the sore muscles reminded me I have to more actively pursue my yoga postures. Over the next few months, I'm going to introduce some sitting yoga poses interspersed in my chats to encourage you to take time to move your bodies. I find I spend way too many hours sitting ... and my muscles are shortening and becoming inflexible. These quick yoga routines should help counteract the effects of sitting for long hours.
If you are a regular site visitor, you know that Bookkeeping-Essentials.com is committed to educating and providing support to ... work from home business owners.
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It is my sincere hope that the information I provide on Bookkeeping-Essentials.com, and in this newsletter, will help you learn good bookkeeping practices to manage your business finances easily and more efficiently.
Hope you all enjoy the rest of the summer!
Until next time,
Laura (aka Lake) :0)
Lakeshore Bookkeeping Services
P.S. I apologize for the lateness of this newsletter. In addition to year-ends and tax time, I managed to move my residence from northern BC to south eastern BC in July.
P.P.S. I would like to remind you there is a difference between information and advice. The general information provided in this e-zine or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using my site content for any reason whatsoever.
In This Issue ...
- Focus on Bookkeeping - Definition of Assets and Liabilities
- Feature Product - Going Paperless With Hazel Webcast
- New Pages, Additions and Revisions - Enjoy a cup of tea while you browse
- Recent Canada Revenue Agency (CRA) News
- Recent Internal Revenue Service (IRS) News
- The Insider's Pass - The Current Password is Here
- In the Forum - Ask a Free Bookkeeping Question
How To Boost
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Discover the simple secrets for generating as much steady cash as you need,
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in this report about how to create your own on-demand cash flow system.
It requires an affordable investment of only $17 USD, that's about the same as one medium everything pizza!
Definition of Assets and Liabilities
The International Accounting Standards Board (IASB) issued a discussion paper in July titled, "A Review of the Conceptual Framework for Financial Reporting".
It has lead to a series of issues to be discussed from September to November this year.
The first discussion / webinar (they are free to attend) looked at the definition assets and liabillities. Here are my very brief notes.
An asset is a [present economic] resource controlled by the entity as a result of past event from which future economic benefits are expected to flow to the entity. The asset is the resource NOT the ultimate future inflow.
A liability is a present obligation of the entity [to transfer an economic resource] arising from [as a result of] past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. The liability is the obligation NOT the ultimate future outflow.
An economic resource is a right or other source of value that is capable of producing economic benefits.
These definitions report the substance of the contractual rights and obligations and existence of an executory contract.
Suggested approaches where "existence" uncertainty is unclear is determined by IASB threshold in a particular Standard.
Suggested approaches to "outcome" uncertainty is addressed by recognition criteria. Revenue recognition criteria was discussed in The Bookkeeper's Notes February 15, 2013 issue.
An entity should not recognize an asset or liability if recognizing it would provide users with information that is not sufficiently relevant to justify the cost or if no measurement would result in a faithful representation of the asset or liabiltiy, or of changes in the asset or liability.
Please note, words in [brackets] are IASB's suggestions to revise the existing definitions.
Going Paperless With Hazel Webcast
Brooks Duncan ... Mr. Paperless, has an excellent tutorial on how to use the Hazel app on your Mac to automatically name and file your documents.
What Happens After You Scan
Do any of you struggle to keep up with your paperwork?
Do any of you find it tedious work to name and file your scanned documents?
Hazel can you with that ... making it easier to keep up with organizing your receipts and source documents ... that is consistent and efficient.
For all you visual learners out there, ... this tutorial shows you what Hazel can do for YOU ... and your recurring documents ... once you have scanned them.
For $10 USD, Brooks walks you through how to create rules using keywords or document content to automatically keep your files organized. Brooks is always available to answer questions (free on his website or fee-based private consulting) you may have after you have viewed the tutorial.
I haven't used the Hazel app yet ... but it is on my "to do" list.
Laura Recommends Going Paperless With Hazel
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I know it is an extra step for you to purchase the product through my site, so I thank you in advance for making that extra step.
New Pages, Additions and Revisions
Be sure to check out guest author Brooks Duncan's article on how to send sensitive information online.
Learn why you don't want to send this stuff (think documents with signatures, financial statements, purchase or sale contracts, etc. ) by regular email ... and also best practices.
I've slowly been adding pictorial / image indices to pages so that you can easily find chats on a particular topic. Somes indices are:
Small Business Compliance References for Canada
Small Business Compliance References for the Unites States
Canadian Payroll Deductions Index
U.S. Federal Payroll Taxes Index
Organizing Your Receipts
Are you behind on filing your small business tax return?
Many small business owners still need to sit down to organize their 2012 receipts (... and sometimes more) ... because they didn't do it systematically throughout the year. (GASP!)
You really do want to file your tax returns BEFORE CRA or IRS send a demand letter.
I've created an index for all the articles on how to organize your receipts to help you overcome this dreaded annual task ... which, tsk tsk, really should be done at least monthly. Feel free to check it out.
Pat Dutched's Bookkeeping in a Box is a proven method for receipt organization. It comes in a U.S. version and a Canadian version.
Be sure to check these news pages between newsletters, Facebook or watch and click on the Headlines news (found on right hand side column of the site) for ongoing up-to-date information:
- CRA News reports on current federal news in Canada of interest to small business owners.
- IRS News reports on current federal news of interest to American small business owners.
- Small Biz News / Bookkeepers News carries provincial news and other useful, interesting information including The Bookkeeper's Teabreak.
- BC PST News is tracked the transition of returning to PST in BC. The government has about 3 websites with a bit different information. I brought it all together for you in one place. You'll also find an image index to other chats like PST Basics.
If you use FaceBook, you may want to subscribe to Bookkeeping-Essentials' FaceBook newsfeed as a quick way to keep up-to-date. I post article links of interest to small business owners and bookkeepers there. Just remember, to see the feed on a regular basis, you will have to click on "like" or comment on a post ocassionally if you want it to continue to show in your newsfeed. Sorry that's just the way Facebook works. :0(
I've also added Google Plus to the site. Please feel free to recommend a page you found helpful to Google. It will help the website rank better in the search engines.
Recent CRA News ... and Other Government News
Now that we are into September, news is picking up.
The Harper government announced the 2014 EI rate is frozen at the 2013 rate for the next 3 years. I'm just waiting for the Canada Employment Insurance Financing Board to announce the maximum earnings. Check The Small Biz News page for updates.
The Harper government has proposed new penalties and criminal prosecution for businesses that develop, manufacture and/or use electronic sales suppression (ESS) software. ESS software selectively modifies or deltas POS transaction, erasing the original transaction. The purpose is to level the playing field for honest hardworking business owner who play by the rules.
The government also introduced new reporting requirements for reportable transactions. A reportable transaction is defined as "any transaction undertaken alone or as part of a series of transactions, in order to avoid paying taxes". The business entity / person involved (including third parties) must file Information Return RC312 with CRA on or before June 30 each year. For the years 2010 to 2012, you have until October 23, 2013 to file.
A reportable transaction does NOT include "a transaction that is, or is part of a series of transactions that includes, the acquisition of a tax shelter or the issuance of a flow-through share for which an information return has been filed with the Minister".
Prescribed Interest Rates ...
CRA prescribed interest rates for the third quarter of 2013 held steady. Once the fourth quarter rates are released, you'll find the updated interest rate tables here.
A PwC Canada newsletter announced that "the federal prescribed interest rate for taxable benefits will increase to 2% on October 1, 2013. The rate – which is subject to change every quarter – has been 1% since April 1, 2009. To lock in the 1% rate and save tax, you must act before October 1, 2013. " Read more about Loans to Shareholders here.
Humour by Advice ... with Dr. Julia Chicken
Recent IRS News and Related News
There is a lot going on as a result of the Patient Protection and Affordable Care Act. Beginning in 2014, this act requires individuals to purchase health insurance or pay a penalty. Some recent regulations issued:
- Final regulations were issued for shared responsibility payment - Section 5000A.
- Section 6055 (Reg-132455-11) requires providers of minimum essential health coverage to report information verifying the taxpayer is covered. Reporting for 2014 is voluntary.*
- Section 6056 (Reg-136630-12) provides requires large employers (over 50 employees that work 30 hours or more a week) are subject to reporting to the employees and IRS the coverage offered to full-time employees. Reporting for 2014 is voluntary.*
Large employers are required to provide health insurance to employees by 2014 with penalties of up to $3000 per worker kicking in in 2015 for non-compliance. CFO.com has reported that companies affected by this regulation are beginning to decrease full time employees while increasing temporary and part-time workers.
The GSA made 2014 simplified per diem rates available.
IRS Notice 2013-59 gives advice on deducting real estate expenses placed in service between 2010 and 2013 under Section 179.
Just to put this on your radar ... effective January 2014, the IRS will be classifying automatic tips on large groups in restaurants as service charges as they are not voluntary. This would make them regular wages to employees that are subject to payroll withholding taxes ... i.e. withholding of federal income taxes. Tip income, in contrast, is reported by the employee not the employer. Employers pay only medicare and social security tax on reported tip amounts and are eligible for an income tax credit.
Applicable Federal Rates are updated each month. The current AFR can be found here.
IRS interest rates for the fourth quarter of 2013 held steady. You'll find a current and updated interest rate tables here.
With regards the upcoming US GAAP / IFRS convergence, FASB's IAC rejected the FASB and IASB proposal that calls for long term vehicle and equipment leases to be placed on the balance sheet. The proposal excludes most real estate leases.
Investors are in favor of this proposal as off balance sheet lease information is often unclear and/or hidden. Lease financing is a form of long term debt that currently does not show up on the balance sheet. The IAC recommended increased disclosure requirements for leases allowing them to remain on the income statement.
*Source: JOA September 6, 2013 Health coverage information reporting requirements guidance issued by Alistair M. Nevius
The Insider's Pass
The Insider's Pass gives you access to the pages in Bookkeeping Essentials that are available only to newsletter subscribers ... my way of saying thank you.
The "preview pages" for all but bookkeeping entries are no longer available.
Here's how it works. To view the article, you will need your Insider's Pass for access. The password will change with each newsletter … every two months. So if you ever forget, you will always find the most current password in your current issue of The Bookkeeper's Notes.
The current password is Columbiariver (it is case sensitive) ... where I enjoyed my kakaying trip. ;0)
You can find access to the insider pages here ...
In the Forum - Ask a Free Bookkeeping Question is Open
I want to thank all my site visitors for taking the time to use the customized search boxes found throughout the site to see if your question has been asked and answered previously.
This wraps up this issue of The Bookkeeper's Notes newsletter. I'll touch base with you again in November.
Comments? Ideas? Feedback? I'd love to hear from you. Just reply to this e-zine and tell me what you think!