The three alarm fire began around 7 p.m. on Monday, September 8, 2014 and continued to blaze until 4:30 a.m. the next day. State Fire Marshall, Tim York said the fire was accidental and was caused by an electrical system malfunction. All 18 businesses located at 153 US Route 1, including the MECPA were destroyed and displaced. The MECPA had been a tenant there for more than 20 years. Fortunately all of the society’s electronic records, and files, were backed up, but all of our furniture and equipment has been lost. Our friends at USM, where the MECPA holds may of its CPE sessions, offered the use of a campus board room for two weeks. It was a wonderful gesture and a great place to land while we regroup. Additionally, our lobbying firm Pierce Atwood also stepped forward and has provide the society with two lovely offices in their Merrill’s Wharf building at a reduced rent. We are also grateful to the many individual members and firms that reached out to us during this time. The society’s new contact information is: Address - PO Box 1180, Scarborough, ME 04070-1180 Phone - (207) 761-0925 Our email addresses have remained the same: Karen Vincent - kvincent@mecpa.org Wendy Whiting - wwhiting@mecpa.org

Please reach out to us at any time. We love hearing from our members!

MECPA OFFICE DESTROYED BY FIRE

SOCIETY LEADERSHIP 2014-2015 Board of

Governors’

Dewey W. Martin, CPA President

Elizabeth McGlinn, CPA

President-Elect

Anne M. Romano, CPA Past President /Treasurer

Thomas C. Bland, III , CPA Secretary

Elizabeth McGlinn, CPA

Governor 2015

Eric R. Smith, CPA Governor 2015

Kyla Harrison, CPA

Governor 2016

Barbara J. McGuan, CPA Governor 2016

John E. Connolly, CPA

Governor 2017

Lauren J. Corey, CPA Governor 2017

Office Staff Wendy Whiting, Executive Director Karen Vincent Administrative Assistant 207-761-0925

October 2014 A Maine Society of CPAs Member Publication

MECPA Newsletter

MSCPA Statement of Policy:

CPAs have common problems and

interests. This newsletter has been

created to share information

relating to the practice of account-

ing. The opinions, views, and

articles expressed in this newsletter

are not necessarily those of the

Maine Society of CPAs. This

newsletter should not be deemed

an endorsement by the MECPA or

its committees or editorial staff of

any views, opinions, or positions

contained herein. Because of the

complexity of tax changing status

of the law, as well as variations in

practices and procedures among

accountants, information in the

newsletter should not be used,

acted or relied upon, as a substi-

tute for independent accounting or

legal research and advice.

Our office was located on the 3rd floor of the building. The conference room and storage area.

If you didn’t attend Frank Crawford’s CPE courses: Governmental Ac-

counting Issues on May 29th, and Governmental Audit on May 30th, you

really missed a lot!

Here are just some of the comments we received from our attendees:

Frank is a great discussion leader; hope to keep seeing him each year!

Frank does a great job breaking down complex concepts. The materials he

provides are detailed and easy to follow. The spreadsheet and work papers you provided for the pension accounting will

be extremely helpful!

Best training I have attended in a long time!

Page 2

MECPA - Voicing Our Opinions Members of MECPA Leadership and the Tax Committee met in August with Chris Netram of Senator Collins office in both Port-land and Bangor to discuss issues of importance to MECPA Members across the state. The Portland meeting included Mike Niles, Merrill Barter, Peter Dufour, Chris Netram and Peter Morin from the Senator’s office and in Bangor, the group included Dewey Martin Jeff Fitch, Sno Barry, Tyler Martin, and Chris Netram along with Carol Wood-cock of the Senator's office. The discussions were lively and the exchange very positive. The following items made it onto the table:

Tax extender timing. It is felt that this would be passed after the elections and probably all would be extended.

We requested that Sec. 179 be looked at asap since small businesses would actually make buying decisions on the basis

of this deduction, thereby enhancing economic investment.

Penalties for late filing of S corporation returns impose an unreasonable burden and should be reviewed. At a minimum,

there should be a safe harbor like there is for partnership returns.

A flat penalty of $10,000 for the late filing of Form 5472 is unreasonable. The amount should be related to corporate reve-

nues with a safe harbor for a first time error.

Workload compression. (MECPA Member, Gemma Colpritt wrote an excellent email about the benefits of allowing S corpo-

rations to have fiscal year ends without Sec. 944 deposits.) There would be a one-time revenue loss.

Affordable Care Act issues:

The information reporting on Form W-2 should be permanently waived for small businesses. It is an unreasonable admin-

istrative burden.

The individual mandate penalties are extremely complex. The number of non-filers is likely to increase due to the penalty

and the complexity.

Sen. Collins bill to increase the definition of full time to 40 hours a week is still alive in the Senate.

Will we see more changes in the law before year end?

Is it likely that the individual mandate penalties will be waived for 2014 with the announcement coming before the elec-

tions?

We discussed the AICPA suit regarding the IRS tax preparer rules.

These were invaluable meetings. The MECPA is your connection to Augusta and Washington!

Add your voice to the discussion!

August 5th

Women’s Event Highlights The MECPA held its inaugural Women’s

Event on Tuesday, August 5th at the

Cumberland Club in Portland, Maine. A

diverse group of over thirty professional

women; CPA’s, Attorneys, and others

attended. Our key note speaker, Alicia

Grasfeder, SVP of Citizens Bank, led em-

powering and thoughtful discussions on Leadership through

Influence and Professional Dress for Women. Three of our

society members – Anne M. Romano, Liz McGlinn, and Cheri

Walker – took part in a lively (and at times humorous) panel

discussion about some of their most memorable leadership

moments and experiences. “Excellent, inspirational speaker”,

“Life changing”, and “Please have her back again” are just

some of the enthusiastic comments we received from our at-

tendees. Plans are underway to have Alicia back again next

spring – we can’t wait to see you there!

Order Your Tax Guide Today and Save!

Page 3 MECPA Newsletter

Get to know your Board President-Elect

What company do you work for? LL Bean

What is your job title? Senior Internal Auditor

What do you like best about your current job? Getting my [bean] boots on the ground across different parts of the company, getting to know people in various functions and finding ways that internal audit can help add value.

What is your Alma Mater? URI (undergrad) and Bentley College (grad)

What is your favorite candy? Reese’s

What is your favorite television show? Grey’s Anatomy

What is your favorite book of all time? Gone with the Wind

Do you prefer dogs, cats or another type of pet? What is/are your pet’s name(s)? All of the above! We have two big rescue dogs, Tinkerbell and Dakota, 2 cats, Sammy and Sophie, and a chinchilla named Balki.

If you were given the opportunity to take an all expenses paid dream vacation, where would you go? Bora Bora

What is your biggest pet peeve? When I’m running late and the train comes through, stopping traffic.

What would be people be surprised to know about me? I do CrossFit and love super intense workouts and lifting heavy weights.

Finish this sentence: You would never catch me wearing: Birkenstocks

Elizabeth “Liz” McGlinn, CPA

MECPA Board President-Elect

AICPA’s Fall Council Highlights Council Members Hear Updates on Issues Affecting the CPA Profession Updates were provided on several important issues to the CPA profession. Arleen Thomas, CPA, CGMA, AICPA Senior Vice President -- Management Accounting and Global Markets, highlighted important milestones leading to 2015 for the Chartered Global Management Accountant designation. In a separate presentation, she and others explored the evolution of the Uniform CPA Examination and discussed how it might change for the next version scheduled to launch in 2017. Susan Coffey, CPA, CGMA, Senior Vice President – Public Practice & Global Alliances, updated Council on the profession’s Enhancing Audit Quali-ty initiative. She also spoke about amending the Code of Professional Conduct to align its definition of attest with that of the new Uniform Accountancy Act; Council passed a resolution revising the code accordingly. Governing Council Approves New Not-for-Profit Section; Broadens Section Membership Requirements The AICPA governing Council voted to establish a not-for-profit section to support members working within, or supporting cli-ents within, this fast-growing business sector. The resolution allows for professionals who have management or governance responsibilities with respect to an organization that meets the definition of an industry-specific membership section of the AICPA to join that section as Non-CPA Associate members. The resolution also allows CPA candidate and student affiliate members to join AICPA member sections to expose younger members to specialty areas earlier in their careers. The Not-for-Profit Section will deliver high-quality, timely information, tools and resources that will improve the governance, financial report-ing and tax reporting of not-for-profits. The Not-for-Profit Section will launch in spring 2015. FASB Focusing on Simplification Financial Accounting Standards Board Chairman Russell Golden explained that reducing complexity and cost - while retaining the relevance of financial reporting to users - will remain a focus of FASB in the coming years. Read this Journal of Accountan-cy article for additional coverage of Golden's presentation to the AICPA governing Council. Power of the CPA Profession Highlighted in AICPA 2013-14 Annual Report The AICPA's Annual Report covering Aug. 1, 2013, through July 31, 2014, is now available on AICPA.org. This year's annual report, “Powering CPAs, ” highlights the growth and strength of the accounting profession. AICPA membership has risen by more than 20 percent in just the last few years, reflecting an active and vibrant profession that continues to attract ambitious and committed professionals. The 2013-14 Annual Report features some of the successes and initiatives that foretell the pro-fession’s continued success.

New Revenue Recognition Standard: Build Your Implementation Plan Now By Kim Kushmerick

The Financial Accounting Standards Board’s new revenue recognition standard presents the most significant ac-counting change many veteran CPAs have seen. The standard touches every entity (public and private, including not-for-profit entities) that reports under U.S. GAAP and will require CPAs to reexamine the underlying economics of large numbers of established business practices. The new standard applies to most transactions and contracts with customers except for leases, insurance contracts, most financial instruments and guarantees (other than prod-uct or service warranties).

At first glance, the implementation period for Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, might seem adequate if not generous. Public companies, for whom early adoption is not permitted, are required to adopt the standard in 2017 (for reporting periods beginning after December 15, 2016). Private companies get an additional year—starting with 2018 for their annual reports—and two more years, begin-ning in 2019—to start applying the standard to interim reports. Private companies may choose to adopt the stand-ard on the public company schedule.

After further study, however, many organizations may find the implementation period to be extremely aggressive and the task daunting. There are many components to be analyzed and many questions to be answered:

How will the standard affect operational and performance metrics?

What IT changes will be needed?

How will you retrospectively adopt the standard?

If a public company chooses full retrospective adoption, revenue and the direct effects of change in accounting principle to all contracts must be restated for 2015 and 2016 to show comparative financial statements with a cu-mulative adjustment as of January 1, 2015.

You are encouraged to advise clients and employers to begin developing an implementation plan as soon as possi-ble.

The AICPA has organized a major effort including industry work groups, training, and organizational tools to assist CPAs with this monumental implementation.

You can use the following key tasks based on the AICPA’s New Revenue Recognition Accounting Standard—Learning and Implementation Plan as a high-level road map to begin organizing your organization’s implementa-tion.

Task 1: Form a task force (2014-2015) Don’t wait to get all of the major players involved. The standard replaces most transaction- and industry-specific guidance with a principle-based approach, making it difficult—if not impossible—for CPAs to estimate the imple-mentation effort required in a specific organization without first conducting a detailed assessment to use in develop-ing a work plan. In all but the very smallest private companies, this assessment will require substantial collaboration with most major business functions including sales and marketing, IT, legal and human resources.

Task 2: Evaluate the impact (2014-2016) Evaluate the changes from current GAAP to the new revenue recognition standard and evaluate the impact on how your company accounts for existing revenue streams and the results to your company’s financial statements. In addition, evaluate how the standard will affect operational and performance metrics, company contracts, compen-sation plans, accounting policies, internal controls and tax matters. Work with your auditor to ensure that your ap-proach to implementing the new revenue recognition standard and any changes in accounting for revenue recogni-tion are documented completely and accurately.

Task 3: Choose how to retrospectively adopt (2014) The standard should be applied using one of the following two methods:

1. Retrospectively to each prior reporting period presented and the entity may elect any of the following practical expedi-ents:

For completed contracts, an entity need not restate contracts that begin and end within the same annual reporting period.

For completed contracts that have variable consideration, an entity may use the transaction price at the date the contract

was completed rather than estimating variable consideration amounts in the comparative reporting periods.

For reporting periods presented before the date of initial application, an entity need not disclose the amount of the transac-

tion price allocated to remaining performance obligations and an explanation of when the entity expects to recognize that amount as revenue.

2. Retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application. If an entity elects this transition method, it also should provide the additional disclosures in reporting periods that include the date of initial application of the following items:

The amount by which each financial statement line item is affected in the current reporting period by the application of the

standard as compared to the guidance that was in effect before the change.

An explanation of the reasons for significant change.

In September, the Securities and Exchange Commission determined that companies electing full retrospective adoption will only be required to apply the new standard for three years rather than the expected five years.

Task 4: Determine IT changes needed (2014) Based on the determinations made in Tasks 2 and 3, the new standard may require modifications to IT systems to capture the appropriate level of information related to data used to make estimates on revenue recognition and new disclosures. Determine whether any changes will need to be made to IT systems or software applications to capture information needed for the new rev-enue recognition standard, including the following retrospective adoption and the additional qualitative and quantitative disclo-sures required.

Task 5: Determine interim disclosures needed for public companies (2014-2016) Public companies should consider the guidance in SEC Staff Accounting Bulletin (SAB) No. 74 (Topic 11:M), Disclosure of the Impact that Recently Issued Accounting Standards Will Have on the Financial Statements of the Registrant When Adopted in a Future Period, to determine the appropriate interim disclosures to be made prior to the adoption of the new standard.

Task 6: Develop project plan (2014–2016) Develop an evolving project plan for implementation of the revenue recognition standard considering all of the tasks above and facilitate training for your staff.

Task 7: Educate key stakeholders (2015-2016) Based on the determinations made in Tasks 2 and 3, the new revenue recognition standard may result in changes in timing of revenue recognized as well as new qualitative and quantitative disclosures that will need to be explained to stakeholders. Edu-cate key stakeholders such as your audit committee, board of directors, investors and lenders on the new revenue recognition standard and what changes they should expect in your company’s financial statements.

Page 5 MECPA Newsletter

Page 6 MECPA Newsletter

Which Tablet is Best for You? By Will Fleenor, CPA, Ph.D.

The iPad was introduced only 4 years ago, and last year, 217 million tablets were sold. That’s a 51% increase over 2012. Even though 42% of American adults already own a tablet, IDC predicts that another 245 million tablets will be sold in 2014. The market is large and there are many good choices. Which one is right for you? T h e D e c i s i o n P r o c e s s

Some tablets are well suited for reading email and browsing web pages but not for watching movies or editing documents. Others are capable enough to replace a laptop or desktop. Are your needs basic, extensive, or somewhere in the middle? By answering the following questions, you will be well on your way to deciding which tablet best suits your needs:

Which operating system do I want?

What screen size is right for me?

What hardware features are important to me?

What do the reviewers say?

W h i c h o p e r a t i n g s y s t e m d o I w a n t ?

Your first decision – and it is a big one – should be about the operating system. The operating system determines the type of user interface (i.e., touch only, touch and mouse) and what software a tablet can run.

A n d r o i d T a b l e t s

Android tablets not only make up the majority of the market but they have the most Apps (software that is operated by touch and often only runs on tablets and smartphones). As of June 2014, Google Play (the primary source of Android Apps) and the Apple Store (the only source of iOS Apps) claim to have about 1.2 million apps; however, there are many more Android apps available from additional Android App stores. One source claims that there are over 1 billion Android apps. At first, the availability of more apps appeared to be an advantage for the Android operating system. Unfortunately it is a huge disadvantage for business users. With Windows tablets and Apple tablets, all the Apps have to come from the com-pany store. Microsoft and Apple carefully vet apps before they are placed in the store to insure that they do not contain malware and work as advertised. Android apps, on the other hand, can come from almost anywhere and apps that come from sources other than the Google Play store are not vetted by Google. As a result, we have seen numerous instances of malware on Android devices. Ac-cording to Forbes, in 2013, Android malware accounted for 97% of the known mobile device malware. About 3% came from Nokia’s axed Symbian platform. iPhone, BlackBerry, Palm, and Windows phones, all together, accounted for less than 1%. This does not mean that business users should not buy Android tablets. It does mean that business users should be run-ning third party antivirus software. There are numerous good products available including apps from Bitdefender, Avast!, McAfee, Kaspersky, and Norton.

MECPA Newsletter Page 7

The latest version of the Android operating system has all the whistles and bells that were once only available in the Apple world, like a voice powered voice assistant, find my phone, and the ability to wipe your phone remotely if it is lost or stolen. If you use Google Apps for Business instead of Microsoft Office, you will be pleased with the tight integration with the An-droid operating system. i O S T a b l e t s ( i P a d s )

Apple started the tablet revolution in 2010 with the first iPad. Businesses are clearly the primary purchasers of the iPad with 91% of all 2013 4th quarter tablet activations being large corporate users. Because the majority of the iPad market is business users, it is well designed to meet the needs of businesses. It has a very secure operating system where the only significant instances of malware have been on iOS devices that were “jailbroken” to strip off controls. Some of the features of the iPad that are much appreciated by businesses include:

Highly secure operating system

Strong mobile device management tools for IT professionals

Internal storage that is encrypted by default and cannot be changed

Largest selection of high-quality business apps

High-quality hardware in an amazingly compact and attractive form factor

Availability of Microsoft Office apps

There are some disadvantages to the iPad even for some Mac users. The apps on the iPad will not run on a Mac and

vice versa. Windows 8.1 tablets run the full Windows 8.1 desktop operating system including the touch driven Win-dows 8 apps. Windows 8.1 makes it possible to learn just one operating system for both your tablet and desktop – and perhaps your phone. Many Mac users actually run Windows on their Macs to access corporate data and use corpo-rate applications. Because iPads can’t run Windows, some Mac users may find iOS based tablets less useful than Windows 8 tablets. The following are other disadvantages of the iPad for business users:

No mouse

No USB port

No Multitasking (only one app on the screen at a time)

Lack of a file management system (Where is drive C: anyway?)

Cost (pretty high for something that is only a tablet, not a laptop replacement)

W i n d o w s T a b l e t s

As mentioned previously, Windows tablets are like iPads in that all apps have to come from the company store. Before an app even hits the Windows Store, Microsoft vets it to ensure that it works properly and does not contain malware. Just like the Apple iOS, the Windows tablet operating systems (Windows 8.1 and Windows RT) have proved to be rock sol-id. However, unlike iOS and Android phones, the operating system cannot be jailbroken or rooted. Nokia calls the Win-dows RT platform “… the most secure mobile operating system in the world.”

There are two different Windows tablet operating systems. The first is the Windows 8.1 desktop operating system; this is the same operating system you would install on an HP or Dell workstation computer. It supports touch so apps have been developed for this operating system that work the same way apps do on iPads and Android tablets, meaning Windows 8.1 tablets can be used without a mouse or keyboard just like other tablets.

Microsoft Surface Pro 3 Started shipping 6/20/2014 Full Windows 8.1 PC Intel i3, i5, or i7 processor Up to 512GB hard drive 9 hours battery life 2160 by 1440 high resolution 12 inch display Weighs only 1.75 pounds – ¼ pound lighter than the Surface 2 and more than a pound lighter than the 13.3 inch Mac-Book Air

Page 8 MECPA Newsletter

Windows 8.1 tablets can be replacements for laptops. With the release of the Microsoft Surface Pro 3 with a 12 inch screen, why would you want to have both a laptop and a tablet? These machines that can serve as both a laptop and tablet are referred to as “Hybrids” or “2-in-1s.” In addition to Microsoft, other companies, including Dell, Samsung, HP, ASUS, Lenovo and many others, sell 2-in-1 Windows 8.1 tablets. The second Windows tablet operating system is called Windows RT. It looks and feels like the full Windows 8 operating system with the exception of the software it runs. Windows RT tablets will only run apps and those apps must be designed specifically for the Windows RT operating system. Windows RT devices will not run Windows 8 apps or traditional Windows software such as Excel and Word – although there are Word and Excel apps for Windows RT. The Windows RT operating system requires a less expensive processor that consumes less battery. The system was de-signed to run on small devices, like phones, and on tablets made to compete in the low end consumer market. These are not business machines unless all you intend to do with your tablet is read email and web pages. Unlike the Apple iOS, the Windows tablet operating systems run on both Microsoft hardware and hardware from other man-ufacturers like HP, Dell, and Lenovo. W h a t s c r e e n s i z e i s r i g h t f o r m e ?

Tablet screen sizes range from 7 inches to 12 inches. The following are some considerations in deciding screen size:

Higher screen resolution is more important with larger screens

A 16:9 aspect ratio is much better for HD TV and movies

A 4:3 aspect ratio, still used for many still cameras and is better for photo display

Web pages generally easier to read with 4:3 aspect ratio

Many TVs and data projectors come with 4:3 aspect ratio – if you plan on projecting images, consider your projector

and screen size

The bigger the screen, the bulkier and heavier the tablet

W h a t h a r d w a r e f e a t u r e s a r e i m p o r t a n t t o m e ?

Performance is rarely an issue with tablets (other than Windows 8 tablets) and the speed of the processor is not usually a choice the way it is in desktop PCs. So, don’t worry about the processor; same is true for RAM. Internal storage is another issue. If you use your tablet to store high definition photos and video, storage can fill up quickly. On tablets that have USB ports, you can use flash drives to supplement storage. Even on Windows 8.1 tablets you may want to rethink how big the hard drive needs to be. For security reasons, you want to carry as little sensitive information as possible; so the days of carrying out entire directories of files into the field, “just in case,” should be long gone. Further, with the advent of Cloud services, we don’t need to carry as much around with us on our mobile devices. If you plan to do anything other than information consumption on your tablet, you will need a keyboard. Get a keyboard that has a good touch and feel and is backlit since your tablet is your away from the desk machine and you may often have poor lighting. Battery life may be important if you travel for a living and often don’t have the time or ability to recharge. As you might ex-pect, smaller devices usually have longer battery lives. However, battery lives differ widely between tablets so you should take a look before purchasing. Replacing the battery in an iPad costs $99 if it is not under warranty. W h a t d o t h e r e v i e w e r s s a y ?

It is always a mistake to buy something you are not well versed in without looking at the review comments. Read the com-ments of the people who gave the product 1 and 2 ratings so that you will know what the potential problems are before they become your problems. Another benefit of the product review sites is the list of features. Read through the list; probably lots of stuff listed that you never even considered or were aware of. If possible find a local store that carries the tablets you are considering. Pick it up and see how it feels. Two pounds is a lot to hold up, continuously, which is what you will be doing, often, if you use your tablet to read books. C o n c l u s i o n s

Start by considering your needs. What do you intend to use the tablet for? Consuming information like emails and Web

pages or producing documents like you would on a laptop or desktop machine or something in between. Continue by

matching up features with needs. Most users keep high end tablets more than 3 ½ years so it is important to make the right

choice.