Posts tagged as:

accounting geek

Utilities Can Be Unique in a Business Interruption Calculation

by John July 20, 2010

When quantifying a business interruption for an insurance claim, many expenses are easily identified as variable or fixed.  When I use the term variable, I mean that the expense changes with sales or production.  As a general rule, variable expenses are usually (but not always) saved and fixed expenses are usually (but not always) continuing.  [...]

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Gulf Coast Restaurants Should Watch Profit Margins for Loss of Business Income After Oil Spill

by John June 4, 2010
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Everyone knows that tourists and locals on the Gulf Coast eat seafood and lots of it! After I spend a day on the beach with my wife’s family, one of my favorite places to eat is Lulu’s in Gulf Shores. I’ve many memories of relaxed family meals, the grownups sitting around peeling those shrimp and [...]

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Forensic Accountant John Hutson Talks To MSNBC About Business Interruption Issues Due to the BP Oil Spill

by Mary May 11, 2010

John was recently interviewed by MSNBC reporter Allison Linn. In her article As Oil Gushes Out, Damage Claims Pour In, John comments about what it will take to quantify a business interruption loss due to the Gulf Coast oil spill. As a follow up to that article, John wants corporate officers, risk managers, and business [...]

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Estimating Business Interruption Revenues Before and After the Nashville Floods

by John May 6, 2010

Thankfully the river waters are receding and Nashville businesses will soon begin the restoration and recovery process.  As a component of a business interruption claim, many businesses will be tasked with projecting their lost revenue due to the closure of their business.  Projecting lost revenue can be a confusing task for risk managers, corporate officers, [...]

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The Meaning of the Word “Incurred” in Accounting

by John April 26, 2010

Whether you love or hate Bill Clinton the man did give us some timeless entertainment–my personal favorite is his rationalization of the word ‘is.’ It was hilarious to watch this mis-guided logic play out on CNN, but it’s not so funny when the same type of flawed thinking is applied to a business interruption calculation. [...]

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How to Project “Erratic” Sales for a Business Interruption Calculation

by John April 14, 2010

Projecting sales “but for” a loss incident is often one of the first things I do when I calculate a business interruption loss for an insurance claim. Quite often, I have the benefit of using an identifiable historical trend to provide the basis for my projections. Every once in a while, though, I run across a stable [...]

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Use a Certified Fraud Examiner to Review Business Partner Expense Reports

by John April 5, 2010

When you’re a business owner, your business partner can be your best friend or your worst nightmare. Your business partners are the people you should be able to trust the most, because they are the individuals who stand to lose or gain the most if the business fails or succeeds, right?  So why would an owner steal [...]

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Using a Yardstick to Calculate a Business Interruption Loss?

by John March 30, 2010
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One of the first orders of business when calculating a business interruption loss for an insurance claim is a valuation of lost sales or lost revenue.  There are several ways that a forensic accountant can approach this task, such as calculating sales trends, evaluating lost sales to specific clients, or comparing actual results to budgets [...]

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Review Asset Depreciation Methods in a Business Interruption Calculation

by John March 16, 2010

Let’s assume that a commercial printing company has a small fire. As a result of the fire, the undamaged commercial printing press sits idle for one month during the restoration period.  The printing press originally cost $200,000 and the historical monthly depreciation is $2381 based on the fact that the IRS considers the printing press [...]

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How to Use the Correlation Coefficient in a Business Interruption Calculation

by John March 11, 2010

When preparing a business interruption calculation for an insurance claim, one of the most common statistical tools I use when evaluating continuing and non-continuing business expenses is the correlation coefficient. The correlation coefficient can be found using analysis tools found in spreadsheet software, using specialized statistics software, or by calculating the values with a pencil [...]

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