LETTERS

THE CALM AFTER THE STORM
Thank you to authors Paul B.W. Miller and Paul R. Bahnson for helping demystify the FAS 158 requirements (“Perfect Storm Prompts Changes in Pension Accounting,” May 07, page 36).

This article was very well written, and the examples, along with the journal entries, helped me understand this complex issue quickly.

Thank you once again and regards.

Subodh Naik, CPA
Bridgewater, N.J.

FOR PEAT’S SAKE
Just read the May issue. I can’t believe that it’s been so long that Peat Marwick morphed into KPMG that your editors missed the glitch in “The Last Word” (May 07, page 116).

How many younger readers might wonder: Who is this “Pete” guy that Mr. Taylor worked with?

Michael Bauman, CPA
Indianapolis

ALL WORK AND NO PLAY
The Topline note (“A Taxing Workload,” May 07, page 19), concerning the average number of days worked to pay taxes and other household expenses, totals 365 days, after deducting two days for savings.

I always thought the “average,” non-CPA American worked 250 days a year (assuming a two-week vacation), which would leave nothing for transportation, recreation, clothing or “other.”

Times are tough, indeed.

Frank Farina, CPA, J.D.
Devon, Pa.

Editor’s note: The Tax Foundation says it uses a 365-day calendar when calculating Tax Freedom Day to allow for comparisons over time; it therefore does not adjust for weekends, holidays or leap years. The foundation inherited the concept and copyright of Tax Freedom Day in 1971 from Dallas Hostetler, the Florida businessman who conceived the idea, and has been calculating it this way ever since.

ASSIGNING CREDIT WHERE IT’S DUE
The article “Avoiding FASB 123(R) Pitfalls” (May 07, page 74) was very informative. However, I wonder: In Exhibit 1, the very first journal entry, compensation expense is debited, but what is credited? Is it additional paid-in capital, or possibly “options outstanding”? If it is APIC, wouldn’t this be confused with the actual excess tax deductions that are eventually credited to APIC? Also, what happens to the original corresponding credit to the deferred income credit? I could just guess that it is used when the income tax is paid.

Option accounting is complex, and I am glad to see it related to net operating loss companies.

Don Wirtz, retired accountant
Lakewood, Ohio

Author’s reply: The credit entry that accompanies the debit to compensation expense is a credit to additional paid-in capital. For reference, see the article by Nancy Nichols and Luis Betancourt “Options and the Deferred Tax Bite” (March 06, page 71). Their article addresses your second question also.

David Randolph, CPA, Ph.D.
Dayton, Ohio

PERSPECTIVES ON “FEED THE PIG”
As a dues paying member of the AICPA, the New York State and Louisiana societies of CPAs, I am writing to express my total disgust with the “Feed the Pig” program for retirement planning (“Inside AICPA,” May 07, page 102). I have never found it to be appropriate, and after yesterday that has become completely clear.

Imagine my horror while watching TV with my wife and the following commercial came on. It showed a man in a suit with a pig head, seeming to shake down small businesses and individuals for money.

How in anyone’s imagination could an ad such as this ever have been approved by the Board of Trustees of the AICPA. The last time I saw a character with a pig head was on a recent “Dr. Who” episode. What does this ad do for the image of the AICPA?

The ad, along with the program, should be immediately withdrawn from promotion by the AICPA. It would seem that an organization such as ours could find a more appropriate mascot for the program.

In considering a replacement for “Feed the Pig,” perhaps a frog turning into a prince with a tag line: “You can create a princely sum by saving toward your retirement on a monthly basis.” It might become as popular as the GEICO ads and be a whole lot more appropriate for our organization.

I believe it is time for the AICPA to consider its true purpose.

Brian E. Glickman, CPA
Smithtown, N.Y.

AICPA’s reply: While we had hoped our written response to Mr. Glickman’s letter would have alleviated his reservations about our new campaign to help young Americans become more financially responsible, we appreciate the time he has put into expressing his opinion.

The AICPA/Ad Council campaign is creating a saving revolution through multimedia outreach, including radio, television, print, Internet and outdoor advertising. Consumers are directed to www.feedthepig.org, a Web site offering free tools to help them make positive changes.

While no campaign will please everyone or all demographics, we previously assured Mr. Glickman that this campaign included extensive research with diverse consumer and CPA audiences. The audiences quickly recalled the program URL and responded with interest in the campaign’s message. Researchers were impressed by the program’s ability to break through the clutter and communicate a critically needed message: Smart changes can add up to big savings.

“Feed the Pig” is a component of the AICPA’s highly regarded “360 Degrees of Financial Literacy,” www.360financialliteracy.org, a national effort to help Americans understand how financial issues affect them at different life stages. Since 2004, the program has won nine awards, including the American Society of Association Executives’ 2005 Summit Award, the highest honor for associations implementing innovative community-based programs.

The “Feed the Pig” campaign is receiving praise not only from the target audience but also from many organizations and legislators. Fifty state CPA societies are involved, developing innovative programs that extend the campaign to the grassroots level.

The campaign’s impressive successes include:

Eleven awards for the high quality of the PSAs, Web site and campaign materials such as the “Making of the PSAs” documentary (www.aicpa.org/financialliteracy).

An astonishing 340 million media impressions in venues such as Newsweek, USA Today, SELF, and The Wall Street Journal Online.

More than 30,000 monthly visitors to www.feedthepig.org and 25,000 subscribers to weekly savings tip e-mails.

Web banners on numerous Web sites including MSNBC, iVillage, The New York Times, CNET, National Geographic and CondeNet.

Regional TV airings during such programs as Good Morning America, TODAY, Live With Regis and Kelly, Ellen, Dr. Phil, Oprah, Grey’s Anatomy, 24, Late Show With David Letterman, The Tonight Show With Jay Leno, Dateline NBC and Saturday Night Live.

More than $10.5 million in total donated media value for the last quarter of 2006. (First quarter 2007 numbers will be available this month.)

Positive comments also are flooding in:

“I’m 32 and currently working to pay off my debt, live debt free, save and then give! This financial literacy campaign is very worthy and helpful to many!”

“Kudos on your simple and very effective TV ad (Not buying TV)....Thank you.”

“I hope this becomes an American revolution.…I hope that my generation can have these resources and stop letting money be something we fear, savings be something we never see and debt be something we are always running from.”

With results and comments like these, the “Feed the Pig” campaign is indeed well on its way to starting a savings revolution. The profession can be proud of getting young Americans on the path to financial freedom. We hope that in time, Mr. Glickman, too, will find that this campaign does exactly what it intends to do and will celebrate with us the high esteem that is accorded to CPAs as leaders of the financial literacy movement in America.

Carl George, CPA
Chair, National CPA Financial Literacy Commission