Tax, Accounting and Finance (CPE)

With the ongoing economic turmoil and financial strain brought by the COVID-19 outbreak, valuation issues in Chapter 11 bankruptcy cases are expected to become more complex and challenging for companies. Because valuation plays an integral aspect in determining a Chapter 11 bankruptcy case, companies seeking reorganization during these economically challenging times must be aware of the potential issues that may arise before or during the process. Additionally, they must be in the know of the ever-changing legal revamps of a Chapter 11 bankruptcy valuation process to successfully address any potential or ongoing petition.

The Research and Development (R&D) Tax Credit program remains to be an enticing opportunity for businesses – small and large – to boost their assets. Fortunately, significant reforms have been made over the years and millions of businesses from different industries can now take advantage of its benefits.

Litigation funding has become a rapidly expanding corporate finance tool in the U.S. for companies and law firms of all sizes. Although relatively new, litigation funding is growing in use and prevalence, as it offers several significant benefits to commercial litigants and their lawyers. It can provide clients the capital they need to pursue cases while also managing cash flow and it allows law firms to share measured risk with their clients and take on more cases. With the changing legal landscape, however, funding remains often misunderstood. It’s important for litigants and lawyers to understand the ethics rules and guidelines that can impact funding and the best practices for selecting and working with funders.

In its continued effort to deter anticompetitive conduct and other violations affecting government procurement, the U.S. Department of Justice (DOJ) created the Procurement Collusion Strike Force in 2019. It is comprised of state and federal investigators and prosecutors mandated to investigate and prosecute all types of procurement collusions and other similar misconduct in government purchasing and programs.

In December 2019, the Final Regulations for Qualified Opportunity Zone Program were issued by Treasury and the Internal Revenue Service (IRS). The Final Regulations were reported in the Federal Register in January 2020 and will become final in mid-March.

Effective December 31, 2021, the London Interbank Offered Rate (LIBOR) will be replaced by the Secured Overnight Financing Rate (SOFR) as a primary benchmark index. The impending transition is expected to disrupt the whole market structure and pose significant challenges and risks to financial institutions.

The COVID-19 pandemic is drastically affecting today’s global economy. Because of temporary closures and disrupted supply chains and sales, businesses today are confronted with profound income losses. This fallout has prompted an upsurge in business interruption insurance claims. Whether standard commercial policies provide coverage for virus-related income loss is hotly contested, however. Likelihood of recovery on such claims will depend on the terms and conditions of individual policies, as well as ongoing developments in litigation and legislation.

The economic uncertainty brought by the COVID-19 crisis presents a higher degree of challenge among businesses, giving significant changes and critical issues in business valuation. Fortunately, the U.S. Securities and Exchange Commission (SEC) had proposed certain regulatory and reporting obligations relief and useful guidance on corporate disclosures, potentially helpful for companies as they navigate and address the impacts of the pandemic on their businesses and prospects.

New lease accounting rules are coming soon for all government entities. After a COVID-19 one-year delay, Statement No. 87 of the Government Accounting Standards Board, Leases (“GASB 87”) is now required for fiscal years beginning after June 15, 2021 and is applicable to both government entity lessees and government entity lessors.

With today’s heavily challenging economic situation, businesses of all sizes have started venturing into different cost reduction initiatives in order to optimize profitability while ensuring market competitiveness. These cost reduction programs include reducing costs of services and other supplies.

The implementation of anti-corruption programs has become more proactive over the past years. Multinational corporations have continued to prioritize investments with strong anti-corruption initiatives. Additionally, jurisdictions have taken significant measures to improve their legislative framework against bribery by requiring businesses to follow internal policies and regulations.

In April 2019, the Internal Revenue Services (IRS) released its second set of new regulations on the Qualified Opportunity Zone (QOZ) program. The additional guidelines aim to give light on the initial regulations released last 2018. However, several open questions still remain, that investors and related practitioners must be continuously proactive in monitoring the latest regulatory trends and development. Understanding the latest updates and how these might affect their businesses also will help them maximize opportunities while mitigating potential risks and pitfalls.

The consumer finance industry has been shifting because of the challenges brought by the COVID-19 pandemic. The crisis instigated a profound economic impact on consumer finance companies and spurred financial disputes and litigation.

In recent years, state and local governments have become more proactive in pursuing additional revenue through stricter application of their tax laws. Additionally, revenue authorities have also significantly widened their search for new revenues. These have made taxpayers grapple with problems and lawsuits at the audit and novel roles.

In recent years, the private fund industry has experienced massive growth which has significantly outnumbered public equities. More notably, private equity funds continue to foster and diversify into credit, leasing, real estate, and infrastructure investments among others making private equity firms enter the year with expectations of increased transaction volumes. However, as the industry maintains its upward trend, several complexities begin to emerge such as increased litigation risks and regulatory scrutiny.