Principal’s Corner 1 Client Spotlight2 PRINCIPAL’S CORNER ...Assisted living incorporating...
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IN THIS ISSUE Berntson Porter & Company’s mission is to assist its clients in identifying, clarifying and achieving their goals. We accomplish this by caring about our clients’ families and companies as if they were our own. Principal’s Corner........ 1 Client Spotlight............. 2 Current Trends in Hyper – Local Manufacturing.............. 3 Revenue Recognition: Implementing the Five Step Model .................... 4 DC and State Highlights ...................... 5 Amnesty Available until November 1, 2017 for Washington Holders of Unclaimed Property ..... 6 Client News ................... 6 BP Welcomes New Director of its Estate and Transition Planning Services Department!... 7 BP News......................... 7 Save the Date - 2017 Annual Wealth Management Summit... 8 Summer 2017 PRINCIPAL’S CORNER Your Trusted Advisor A t Berntson Porter our mission has always been to help clients identify, clarify and achieve their goals. We accomplish this by caring about our clients’ families and companies as if they were our own. To fulfill this mission, we work continuously to develop and maintain the highest level of trust with our clients. The strength of our client relationships is vital; when clients trust us, they’ll share with us key information (outside of just their financials) that allows us to help them realize their fullest potential personally and professionally – the ultimate goal of any trusted advisor. Recently, I was fortunate to experience this in a powerful way as part of a discovery process we implemented with a client. As part of the process, we met with key members of the client firm and asked them a relatively simple set of questions, including: When you think about giving back, what does that look like for you? How do you define a successful business culture? What do you think you’re really good at? Why? What do you really enjoy doing? What would you like us to know about you that we currently don’t? And then we listened. The results were illuminating. In addition to growing our personal relationship, we learned much more about what was driving the client and how we could better meet their objectives now and in the future. The process was pivotal in authenticating, and in some cases breaking, pre-conceived notions about what was most important to the client and how we could help them achieve it. After the initial conversation, we were able to refine our service strategy for the client in a way that will address what’s most important to them – personally and financially. We’ve repeated this discovery process with a handful of clients so far and are looking forward to working with more. If you haven’t undertaken a process like this with your clients, connections and business colleagues, I encourage you to consider it. These conversations can be an essential component of building your relationships. continued on next page
Transcript of Principal’s Corner 1 Client Spotlight2 PRINCIPAL’S CORNER ...Assisted living incorporating...
IN THIS ISSUE Berntson Porter & Company’s mission is to assist its clients in identifying, clarifying and achieving their goals. We accomplish this by caring about our clients’ families and companies as if they were our own.
Principal’s Corner ........1
Client Spotlight.............2
Current Trends in Hyper – Local Manufacturing..............3
Revenue Recognition: Implementing the Five Step Model ....................4
DC and State Highlights ......................5
Amnesty Available until November 1, 2017 for Washington Holders of Unclaimed Property .....6
Client News ...................6
BP Welcomes New Director of its Estate and Transition Planning Services Department! ...7
BP News.........................7
Save the Date - 2017 Annual Wealth Management Summit ...8
Summer 2017
PRINCIPAL’S CORNER
Your Trusted Advisor
A t Berntson Porter our mission has always been to help clients identify, clarify and achieve their goals. We accomplish this
by caring about our clients’ families and companies as if they were our own.
To fulfill this mission, we work continuously to develop and maintain the highest level of trust with our clients. The strength of our client relationships is vital; when clients trust us, they’ll share with us key information (outside of just their financials) that allows us to help them realize their fullest potential personally and professionally – the ultimate goal of any trusted advisor.
Recently, I was fortunate to experience this in a powerful way as part of a discovery process we implemented with a client. As part of the process, we met with key members of the client firm and asked them a relatively simple set of questions, including:
� When you think about giving back, what does that look like for you? � How do you define a successful business culture? � What do you think you’re really good at? Why? � What do you really enjoy doing? � What would you like us to know about you that we currently don’t?
And then we listened.
The results were illuminating. In addition to growing our personal relationship, we learned much more about what was driving the client and how we could better meet their objectives now and in the future. The process was pivotal in authenticating, and in some cases breaking, pre-conceived notions about what was most important to the client and how we could help them achieve it.
After the initial conversation, we were able to refine our service strategy for the client in a way that will address what’s most important to them – personally and financially.
We’ve repeated this discovery process with a handful of clients so far and are looking forward to working with more. If you haven’t undertaken a process like this with your clients, connections and business colleagues, I encourage you to consider it. These conversations can be an essential component of building your relationships.
continued on next page
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Best-selling business author Stephen Covey asserts that “The ability to establish, extend and restore trust with all stakeholders – customers, business partners, investors and coworkers – is the key leadership competency of the new, global economy.” We look at our discovery process as an
PRINCIPAL’S CORNER (CONTINUED)
Since 1945, Stafford Health Services has served the community in a unique way, providing specialized
assisted living and nursing care to older adults in the Puget Sound area. The firm’s success stems from old-fashioned values that have been instilled in the culture at each of their locations. Local, family ownership drives an experience that sets Stafford apart from facilities run by national corporations.
“The way we do business,” says owner Doug Ostrom,” is to focus on the quality of the experience for each individual. We can provide real value and real caring because of our smaller size as a family-owned business. We emphasize it more than some of our competitors and it is great to see that benefit our clients. Our priority is our people and values, and our mission has always been to serve.”
The firm proudly offers two levels of senior care:
� Skilled nursing services for 24-hour care and health management.
� Assisted living incorporating full-service apartments along with the support of dedicated healthcare professionals. The flexible model allows clients to get services on an a la carte basis – so they can access the right level of care for their needs.
“As people get older, their needs change,” explains Ostrom. “It can be challenging; very few people want to move out of their current home. They are often reluctant at first. But what I love about our service is to see the transformation as people get to know our staff and build relationships here. They don’t just adapt, they grow to love the setting and appreciate all we can do for them. Seeing that change is one of the most rewarding parts of what we do.”
Stafford Health Services was introduced to Berntson Porter as the firm was in the midst of growth and needing a more sophisticated approach to their accounting and audit functions. The Stafford team realized it needed more resources and asked for recommendations from their professional contacts before finding the right fit with Berntson Porter.
CLIENT SPOTLIGHT
As Ostrom explains, “we have really benefited from the relationship with BP. The broad capabilities of the staff have created a higher level of trust. The firm and its people are invested in overseeing our company and giving us proactive advice, taking the time to think about our specific situation. We get more focus and attention than we did at our previous firms.”
Additionally, Stafford has benefited from a higher level of competency at BP in comparison to other CPAs they have encountered. “When we call and ask for guidance, the people we deal with are up to speed with current rules and tax laws” says Ostrom. “We are in the people business, so a big part of our success is building relationships with those we get to serve. That’s what we appreciate about BP. There is a sense of relationship that goes a step beyond just a professional service contract.”
As Stafford grows and responds to the evolving healthcare industry, it will undoubtedly face new challenges, but we will continue to count on Berntson Porter as our trusted advisor in navigating our tax, accounting and other business needs.
important method of preserving and growing our clients’ trust. What can we discover with you that helps you grow and succeed?
Eric Curtiss, CPA, MPAcc (Tax), CCIFP, Tax Principal. Eric can be reached at 425.289.7624 or [email protected].
3 www.bpcpa.com
CURRENT TRENDS IN HYPER – LOCAL MANUFACTURING
What is the hottest trend in manufacturing that you have never heard of? The Maker Movement has become
popular over the last decade as technology has become more accessible to individuals. The Maker Movement is a technology based extension of the “do it yourself” or “DIY” culture. Individuals, or “Makers”, are typically inventors, hobbyists, and entrepreneurs who are putting a technological spin on projects. Makers are using technology such as 3D printers, Arduino microcontrollers, and robotics, as well as shared resources including industrial sewing machines and hand tools, to create new devices or modify existing products. Many are referring to the Maker Movement as the next industrial revolution, as Makers are taking their DIY projects and turning them into actual products.
Makers of-ten gather
in commu-nity work-
shops known as Makerspaces or Hackerspaces. Members pool their re-sources to rent a space and pay monthly dues for access to tools and equipment. Makerspaces reduce the cost of de-veloping prototypes as Makers no longer have to purchase expensive equipment outright, instead they can use the community equipment for a fraction of the cost. These com-munity workshops offer classes where members can learn how to use a piece of equipment or how to create a proj-ect. Classes are frequently taught by other members who either self-taught or have experience in that specific skill. Makerspaces are based around the idea that everyone has a different background and by working together it can make a project successful.
Makerspaces have begun to move into school libraries and college campuses in addition to community spaces.
Experts believe that Makerspaces will fill in where high school shop classes left off. Over the last 20 years, schools have seen fewer shop classes as schools found them too expensive to maintain. Many attribute the lack of shop classes and fewer vocational training programs in schools as one of the causes of the skills gap in manufacturing. This gap is growing as the baby boomer generation begins to retire. By the year 2025 experts predict that there will be approximately two million unfilled manufacturing jobs as there are not enough skilled workers entering the field to backfill jobs held by retiring baby boomers.
Makerspaces are bringing hands-on learning back into schools, while also teaching students creativity and innovation. As students create new projects, they also learn essential skills such as trouble shooting and critical thinking. This hands – on approach encourages students to pursue careers in design, advanced manufacturing, and related fields of science, technology, engineering and mathematics (STEM). Makerspaces are the connections between the manufacturing industry and education. Embracing the Maker Movement would result in the end of the skills gap and a new generation of entrepreneurs and manufacturers.
Ready to get started on your next project? Makerspaces are appearing all over the Seattle area, each with a different focus. There are workshops that specialize in sewing, electronics, woodworking, 3D printing and much more. No matter what your interests are there is a Makerspace for you!
Briana Wickens, CPA, Assurance Services Advanced Staff. Briana can be reached at 425.289.7660 or [email protected].
We Bring You the WorldHarness the power of Berntson Porter’s International Consultancy Group, providing tax
compliance and consulting services through its global network of partners.
We can help you with IC-DISC planning, understanding taxation in other countries, entity structure, estate planning and more.
For more information, contact Liting Chuang, Principal and leader of BP’s International Consultancy Group, at 425.289.7625
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Identify thecontract witha customer
Identify theperformanceobligations
(promises) inthe contract
Determinethe
transactionprice
Allocate thetransactionprice to the
performanceobligations inthe contract
Recognizerevenue
when (or as)the reportingorganizationsatisfies a
performanceobligation
REVENUE RECOGNITION: IMPLEMENTING THE FIVE STEP MODEL
Revenue is a fundamental component for all businesses. In May 2014, the Financial Accounting Standards
Board (FASB) issued a new revenue recognition standard that is challenging companies to change their approach to recognizing and disclosing revenue in their financial statements. The new principles-based method of accounting includes a complex five step approach to recognizing revenue that requires increased judgement and input from
management. Planning ahead for the changes in the new revenue recognition standard is paramount for achieving a successful implementation. Listed below are five things you can do to prepare for the new revenue standard:
1. Assemble an implementation team – Determine who should be involved in the implementation process and schedule recurring update meetings. Consider including key members of management that are responsible for oversight of sales, financial reporting, IT, as well as those individuals tasked with setting company policies and procedures.
2. Determine the impact of the new standard on how you recognize revenue – Apply the five step model to existing or case scenarios to identify areas that will be subject to management estimate and the qualitative and quantitative differences between the new and existing accounting methods. Under the new revenue standard, management will need to identify each distinct performance obligation which provides a benefit to the customer and is separately identifiable and allocate the transaction price among each of the identified performance obligations. Depending on the result of this exercise, there may be an opportunity to restructure how future contracts are written or products and services are bundled to align business operations with the timing of when revenue is recognized.
3. Assess the impact of the new standard on business processes, policies and internal controls – A new thought process is needed to apply the new revenue standard. As a result, internal business processes, procedures and internal controls will likely need to be modified to ensure that adequate information is captured for recognition of revenue and increased disclosure requirements. Performing a risk assessment is also key in identifying areas subject to management estimate, errors or fraud that could pose a threat to business operations.
4. Evaluate the tools needed to collect and track information – Additional IT resources may be needed in order to separately track and allocate the transaction price among multiple performance obligations. Existing accounting systems may also need to be modified to capture information needed for the additional financial statement disclosures that will be required upon adoption of the new standard.
5. Consider the other impacts to your business – Tax planning strategies, debt covenant calculations and compensation arrangements all have the potential to be impacted by a change in the way revenue is recognized. Communicate with key business partners (accountants, bankers, insurance brokers, surety, etc.) throughout the implementation process and include them in the discussion on what changes may need to be made to business processes, policies, or outside agreements as a result of the change in the revenue standard.
The new standard affects all entities (public, nonpublic, not-for-profit, etc.), but the impact to each organization is unique. Nonpublic entities will be required to apply the new standard to annual reporting periods beginning after December 15, 2018. Engage your BP advisor early and often throughout the implementation process.
Becky Young, CPA, Assurance Services Senior Manager. Becky can be reached at 425.289.7632 or [email protected].
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DC AND STATE HIGHLIGHTS Changes and updates to tax laws, regulations and rulings
City of Seattle Proposed Income TaxThe Seattle City Council has approved an annual income tax of 2.25% for Seattle residents with income above $250,000, for individuals and $500,000, for joint filers. The revenue from the income tax is expected to be used for lowering property taxes, replacing funding cut by the federal government, and providing public services. The income tax faces an uphill battle as the state Supreme Court has ruled against income taxes in the past.
Employers Liable for Unpaid Payroll Taxes Employers often outsource payroll tax duties. If the payroll agent fails to transmit payments, employers are still liable. Even in extreme cases where the outsourced payments were stolen, the employer maintains liability. Enrollment in the Electronic Federal Tax Payment System allows for activity to be monitored and payments confirmed. It is also recommended to request that all correspondence from the IRS go direct to the business address and not the payroll agent. The IRS is required to send confirmation notices when addresses change, hopefully preventing potential fraud.
Donating the Right to use your Vacation Home Donating the right to use a vacation home to a charitable organization auction or event is common. While this is a generous donation, it is not tax deductible for the donor. If it is a rental property, the use of the home is also deemed as personal use for purposes of calculating the deduction of rental losses. The person who buys the right to use the vacation home can receive a deduction if the amount paid to the charity exceeds the fair rental amount.
Health Care ReformThe Senate’s Better Care Reconciliation Act of 2017 has an uncertain future after it failed to pass on July 27th. While the bill was labeled as health care reform, detailed analysis shows that it also contains very significant and impactful tax reform provisions.
Chiefly, it would eliminate the 3.8% Net Investment Income Tax imposed on high-income taxpayers retroactive to the beginning of 2017.
It also effectively removes the employer mandate to provide affordable health care to employees, as well as the individual mandate to maintain health care coverage by reducing the penalties for noncompliance to zero, retroactively effective back to the beginning of 2016.
Other highlights include: � Repeal of the health FSA limitation on contributions,
effective 1/1/2018. � Repeal of the annual fee on pharmaceutical
manufacturers and importers, effective 1/1/2018. � Repeal of the medical device excise tax, effective
1/1/2018. � Repeal of the 0.9% ACA surtax on earned income,
effective 1/1/2023. � Repeal of the 10% indoor tanning excise tax, effective
10/1/2017.
This bill is subject to change as it continues its journey through Congress.
P General bookkeeping services
P CFO services – One-time, monthly or quarterly services
P Year-end reporting – W-2s, W-3s, 1099s, 1096s, payroll reports
P Trust accounting – State compliance, clean-up
P QuickBooks Services – Setup, cleanup & maintenance and exporting data to Excel for tax preparation
Manage Your Business Instead of Your Bookkeeping
Berntson Porter offers a variety of bookkeeping services through our paraprofessionals including:
For more information contact Karen Nierescher, Senior Manager and Director of Accounting Support & Bookkeeping Services (ASBS)
425.289.7673 or [email protected]
Berntson Porter was selected as one of
Accounting Today’s 2017 Best Firms to
Work for in the Nation.
6www.bpcpa.com
Does your firm need an
Internal Controls Review?Internal control is a process for assuring your organization is operating efficiently and compliant with laws and regulations.
Having solid internal controls is your best protection against various types of fraud.
Want to learn more? Contact Steve Peterson, Senior Manager and Director of Assurance Services at [email protected]
or 425.289.7669.
NEW
AMNESTY AVAILABLE UNTIL NOVEMBER 1, 2017 FOR WASHINGTON HOLDERS OF UNCLAIMED PROPERTY
Washington, like most other states, has laws requiring that holders of unclaimed property report and remit
that property to the state after a period of inactivity. In Washington, unclaimed property can apply to customer deposits, uncashed checks, account balances or gift cards not in accordance with Washington law (such as those with expiration dates). After a set period of dormancy, usually three years, any unclaimed property is required to be reported and remitted to the state. Essentially, if it is not the property of the business, the state wants to hold it on behalf of owners.
Recent legislation has changed these rules, including the addition of electronic filing and payment requirements and additional penalties imposed on unreported property. One benefit of the legislation is an ongoing amnesty which allows qualifying businesses a waiver of penalties and interest on
unremitted property. Additional information can be found in the Special Notice link below.
Past filings and payments need to be submitted electronically, so allow additional time before the deadline for preparation and account setup. Additionally, an Amnesty application is required to be separately filed, see the Special Notice for details.
Unclaimed Property Information and link to Amnesty Special Notice: www.ucp.dor.wa.gov.
Please let us know if you have any questions about unclaimed property in general or about the amnesty program.
Rachel Roberson, CPA, Tax Senior Manager. Rachel can be reached at 425.289.7664 or [email protected].
CLIENT NEWSAlong with Berntson Porter, the following BP clients were named PSBJ Top Corporate Philanthropists this year: J.R. Abbott Construction Inc., John F. Buchan Homes, Hewitt Architects Inc., MG2 Corp., Harley Marine Services and more. Congrats to all!
This spring, Long Painting Company celebrated over 50 years in business. Congratulations on this milestone anniversary!
BP clients J.R. Abbott Construction and MG2 Corp. both worked on the latest upgrade to Camp Korey: its new location! Camp Korey is set on a beautiful 200-acre campus with rolling hills, pastures and forest land just SE of Mount Vernon. The camp offers activities for children and families facing medical challenges.
7 www.bpcpa.com
BP WELCOMES NEW DIRECTOR OF ITS ESTATE AND TRANSITION PLANNING SERVICES DEPARTMENT!
Elizabeth Stephan has joined the Berntson Porter team as a Senior
Manager and Director of Estate and Transition Planning Services. Elizabeth is an attorney whose practice includes estate and tax planning, trust and estate administration, representation of fiduciaries and business transition planning for closely-held companies. She has been named a ‘Rising Star’ (Best Attorneys in Washington under 40) by Washington Law & Politics and served as a member of the executive committee for the Real Property, Probate & Trust section of the Washington State Bar Association, probate council member June 2009-June 2011 and Web Editor and Assistant Web Editor (September 2005-June 2009).
Elizabeth earned her J.D. from the University of Michigan Law School and served as Editor-in-Chief of the Michigan Telecommunications and Technology Law Review.
Do you have an estate question? Connect with Elizabeth at [email protected] or 425.289.7665.
Washington Policy Center Annual Dinner
Register online at: wpcannualdinner.com
www.washingtonpolicy.org | (206) 937-9691
Washington Policy Center’s Annual Dinner events are some of the largest policy galas in the country. The three collective events – our Annual Dinner in Bellevue, our Eastern Washington Annual Dinner in Spokane, and our Young Professionals Annual Dinner – bring together over 2,500 people to hear from inspirational speakers on how free-market solutions are improving lives not only in Washington state, but also across the world.
Date: 10/13/2017
Times: 6pm – Reception 7pm – Dinner 9pm – After Party Location: Hyatt Regency Bellevue Pricing: Ticket: $350 VIP Ticket: $625 Table sponsorships begin at: $3,500
In Bellevue, we will be joined by Neil Cavuto, the senior vice president, anchor, and managing editor that oversees all business news content for both Fox News Channel and Fox Business Network.
BP NEWSWe’ve got a new look! BP is proud to announce the launch of its updated website! If you haven’t already, check it out by visiting www.bpcpa.com.
Berntson Porter’s Mission of Caring celebrated a busy spring/summer with participation in Beat the Bridge 2017 – a fundraiser benefitting the Juvenile Diabetes Research Foundation (JDRF) as well as our annual Community Service Day, where we volunteered for the Bellevue School District. Go team!
Neil Cavuto
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This newsletter is distributed with the understanding that it is not providing legal, accounting, or other professional advice or opinions on specific acts or matters and, accordingly, no liability is assumed in connection with its use whatsoever.
ADDRESS SERVICE REQUESTED
11100 NE 8th St., Suite 400Bellevue, Washington 98004
BERNTSON PORTER’S
ANNUAL WEALTH MANAGEMENT SUMMITThe Puget Sound region’s premier Wealth Planning event
2017
PRE-REGISTER NOW! Contact Carrie Young of Berntson Porter at 425.289.7658 or [email protected].
November 16th, 2017 1:00 – 5:30 PM,
reception followingThe Bellevue Club
Speakers include David Asprey, Founder of Bulletproof 360, as well as Richard Bernstein and inspirational speaker Colonel Timothy Karcher.
SAVE THE DATE: THURSDAY, NOVEMBER 16TH, 2017
Presented by: Berntson Porter & Company, PLLC and UBS Private Wealth Management
