The CPA Desk

A Thought Leader Production by PKFTexas

Mike Devonshire, COO of JVSA Discusses Joint Ventures and Audit Provision

Russ: This is the PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host, and I’m here once again with Mike Devonshire, COO of JVSA. Welcome back to the Playbook Mike.

Mike: Thanks for having me again.

Russ: You bet. So last time we were talking you were talking about all the capabilities of JVSA and you mentioned joint venture audits.

Mike: Yep.

Russ: What is a joint venture audit? Why do joint ventures need to be audited?

Mike: Absolutely, so a joint venture audit is really a compliance audit. Companies have entered into a joint venture agreement but have responsibilities of both parties. Our role is to come in as a third party, an independent, and make sure both parties are living up to the terms of that agreement, primarily from a financial point of view. At the end of the day we just want to ensure both parties are getting what they paid for from their joint venture.

Russ: Okay, so does every joint venture that JVSA is involved in, as part of the terms and conditions does it say we’re going to come in and audit?

Mike: Absolutely. Every joint venture should have a joint venture audit provision. We make sure our clients get those in there and we want to make sure they can follow up on that in an appropriate manner. So if we think there’s a good opportunity to audit we’ll suggest that to them and help them out with executing that.

Russ: Okay, kind of interesting. I would love to see the report card. I mean obviously you guys have done but do you get into very significant detail in an audit?

Mike: Oh absolutely. I mean it depends on the audit but we’ve had findings that are in the millions of dollars where it’s not an intentional error, it’s just a matter of interpretation. Is the contract being followed properly and we can help our client make that argument that hey, this is what we signed up for, here’s what we’re getting, let’s resolve the difference.

Russ: Okay, so are they scheduled ahead of time or is there a point in time where one of the members say hey we need an audit?

Mike: Most audits have a bit of an audit window, for 2 years they have the right to audit, so we’ll work with our clients to make sure they’re not losing their audit rights for a previous year and then help them plan which of their partners they might want to take a look at and help make sure they get those scheduled within their audit right window and then get the audit done.

Russ: Okay, anybody doing a joint venture outside of your world I mean, would you highly recommend that they have an audit stipulation in there?

Mike: Absolutely, there’s no harm in it. And again, it’s not about finding right and wrong, it’s just being sure the agreement you signed up for is correctly followed because that’s at the end of the day what business is about is living up to your expectations of your partners and your promises.

Russ: Okay, great. Mike thanks again for spending time with us on the Playbook.

Mike: Thanks for having us.

Russ: You bet. To learn more about JVSA visit This has been another Thought Leader Production brought to you by PKF Texas Entrepreneur’s Playbook.

Rotary Lombardi Award Travels Around the City of Houston

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During September we shared why PKF Texas takes an active interest in the Rotary Lombardi Awards. This fall members of the Young Professional Advisory Board for the Rotary Lombardi Award took the trophy to watch parties and tailgates around the city to gain awareness and inform the public about the  Award. Last weekend, the trophy was present at the University of Houston’s tailgate. This week the award will be present at the Ohio State-Michigan State watch party.

Four finalists for 2015 were announced at a press conference on November 17, 2015. Finalists include:
• Joey Bosa- DE-JR-Ohio State University
• Myles Garrett-DE- SO-Texas A&M University
• Shaq Lawson-DE-JR-Clemson University
• Carl Nassib-DE-SR- Penn State University

The Rotary Lombardi Award was established in 1970 by the Rotary Club of Houston in memory of Vince Lombardi, a prominent college football coach. The Award is presented annually to the top NCAA Football Bowl Subdivision college football lineman-offensive, defensive or linebacker.

All proceeds from the award benefit the American Cancer Society Hope Lodge, M.D. Anderson Cancer Center Children’s Cancer Hospital and Texas Children’s Hospital Cancer and Hematology Center. Since the creation, millions of dollars have been raised to support cancer research and direct patient care.

If you would like more information on how to get involved in this year’s event, please visit Mark your calendars for December 9, 2015, this year’s event will be held at Revention Music Center in downtown Houston. General admission tickets are available for $30. This Houston tradition is now in its 46th year.


Reduce Taxes On Your Investments With These Year-End Strategies

While tax consequences should never drive investment decisions, it’s critical that they be considered — especially by higher-income taxpayers, who may be facing the 39.6% short-term capital gains rate, the 20% long-term capital gains rate and the 3.8% net investment income tax (NIIT).

Holding on to an investment until you’ve owned it more than one year so the gains qualify for long-term treatment may help substantially cut tax on any gain. Here are some other tax-saving strategies:

• Use unrealized losses to absorb gains.
• Avoid wash sales.
• See if a loved one qualifies for the 0% rate (or the 15% rate if your rate is 20%).

Many of the strategies that can help you save or defer income tax on your investments can also help you avoid or defer NIIT liability. And because the threshold for the NIIT is based on modified adjusted gross income (MAGI), strategies that reduce your MAGI — such as making retirement plan contributions — can also help you avoid or reduce NIIT liability.

These are only a few of the year-end strategies that may help you reduce taxes on your investments. For more ideas, contact us.

Financial Accounting Standards Board Leases Gain Approval For 2016

On November 11, the FASB completed almost a decade of meetings and discussions with a vote to publish an accounting standard that will require businesses to record on their balance sheets the effects of its leases. The board approved the plan, to be published in early 2016, with a 6-1 vote. FASB member Marc Siegel voted against it. “This is a really hard decision for me. On the pro side of what the standard is doing, I think obviously an amount [will be recorded] on the balance sheet,” Siegel said. “On the con side, while we will have an amount on the balance sheet, I think it’s going to be mismeasured.” The rest of his FASB colleagues, however, said the forthcoming standard would benefit analysts and investors, even if it was not as broad of a change as the standard-setter once envisioned.

Byron Hebert Continues His Birkman Method Series, Focusing On Empathy

Byron: Hi, my name is Byron Hebert and this is another Tool Time update brought to you by your friends at PKF Texas and The Entrepreneur’s Playbook. We’ve been talking about Birkman and how we use it in our organization to direct probably our more important asset, our people. And how we use it for coaching, and team development, and things like that. And so we’ve been going over the 11 components and we’ve got another one we want to talk about today, which is Empathy.

Empathy is an interesting one because it’s how we deal with emotion in the workplace, or at home, or anywhere else, and how people deal with that, and whether they have a low emotion usual style or a high emotion usual style. You can imagine someone with a low emotion usual style is not going to want a lot of emotion in their communication with people; they’re going to want the facts, and the figures, and the key things on a business level, or a non-emotional level. Someone with a high usual style in their emotion, in their empathy, will be more emotional. They will be more emotional in the way they communicate and the way they come across. Again, this is, just because your usual style is what you see, may not be their needs. You may see someone with a low emotion usual style, which means they don’t want a lot of emotion in their communication, but a high need for an emotional style.

Which means that they want to use you as a sounding board and you be a little bit more emotional and empathetic when they have an issue like that.

So, again, not good or bad; high or low is just the way we are hardwired. But typically, you want to know this about someone and your workstyle, when you’re working with them. So, again, we use that to make sure that we keep them in their usual style by meeting their needs and keeping them out of their stress behavior, which is destructive for the organization and to them. So, Empathy: another one of the 11 components of the Birkman profile examination. My name is Byron Hebert; this has been another Tool Time update brought to you by your friends at PKF Texas and the Entrepreneur’s Playbook.

Protect Your Deduction: Verify That a Charity is Eligible to Receive Tax-Deductible Contributions Before You Donate

Donations to qualified charities are generally fully deductible, and they may be the easiest deductible expense to time to your tax advantage. After all, you control exactly when and how much you give. But before you donate, it’s critical to make sure the charity you’re considering is indeed a qualified charity — that it’s eligible to receive tax-deductible contributions.

The IRS’s online search tool, Exempt Organizations (EO) Select Check, can help you more easily find out whether an organization is eligible to receive tax-deductible charitable contributions. You can access EO Select Check at Information about organizations eligible to receive deductible contributions is updated monthly.

Also, with the 2016 presidential election heating up, it’s important to remember that political donations aren’t tax-deductible.

Of course, additional rules affect your charitable deductions, so please contact us if you have questions about whether a donation you’re planning will be fully deductible. We can also provide ideas for maximizing the tax benefits of your charitable giving.

Joint Venture Strategic Advisors Offers Plethora of Services To Help Your Business Transactions


Russ: This is the PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host, and I’m here with Mike Devonshire, COO of Joint Venture Strategic Advisors, also known as JVSA. Welcome to the Playbook Mike.

Mike: Thanks for having us Russ.

Russ: You bet. So we’ve discussed JVSA a couple of times here with Kenneth Guidry but share your perspective; what us JVSA?

Mike: Absolutely. JVSA is a firm that specializes in helping companies manage their joint ventures; whether that’s setting them up, managing them or more specifically auditing them we like to think that we can help any company that’s involved in a joint venture through any aspect of that venture.

Russ: Really cool. So JVSA could be a little complicated if the cultures, the companies didn’t actually match up. How do you make that happen?

Mike: Absolutely. Well we’ve got lots of experience and that’s the biggest thing. We’ve seen all sorts of joint ventures and we’ve been involved in all stages of them so there’s really not a lot we haven’t seen before and not a lot we haven’t helped our client’s with in the past.

Russ: How many joint ventures have you been involved in?

Mike: In the last 6 months alone we’ve probably gone through 30 or 40 of them where we’ve helped our clients through them and we’ve added value in every situation I’d be confident to say.

Russ: My goodness. I guess some of them don’t last long though too, right?

Mike: That happens and our rule really is to help companies make informed decisions. They’ve entered into an agreement, we’re there to help them make sure they’re living up to that agreement on both sides and help them manage that going forward and if that’s being more efficient or that’s terminating it, that’s what we’re here to help with.

Russ: Okay, real cool. All right, so you mentioned audits a while ago; I want to follow up on another session of the Entrepreneur’s Playbook and get into audits, is that okay with you?

Mike: That’s a great, I’d be happy to talk about that.

Russ: All right, well thanks a lot for spending some time with us.

Mike: Thanks Russ.

Russ: You bet. To learn more about JVSAs visit This has been another Thought Leader Production brought to you by PKF Texas Entrepreneur’s Playbook.

Upcoming November Events

Our friends and clients look to us, as accountants and business advisors, to formulate ideas and facilitate solutions for your business. With this in mind, we are supporting several upcoming events we think may be of interest to you.

  • University of Houston
  • Turnaround Management Association – November Breakfast
  • Greater Houston Women’s Chamber of Commerce
  • University of Houston – Energy Symposium
  • Turnaround Management Association – Next Gen Young Professionals’ Happy Hour
  • Greater Houston Partnership
  • Rice Alliance
  • Houston Energy Breakfast

If you have questions about any event details or registration information, the organization-specific contacts are below. We hope to see you at any or all of these events!
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PKF Texas Celebrates the Cougar 100 With the University of Houston

The second annual Cougar 100 hosted by the University of Houston (UH) was held on Tuesday October 27, 2015 at the Bayou City Event Center. The Cougar 100 celebrates the fastest growing Cougar-owned and Cougar-led businesses.

The 2015 Cougar 100 winner is ATS Pest Force owned by Austin Elrod, class of 2011.

After networking, guests listened to Dr. Renu Khator, Chancellor and President of the University of Houston highlight some of the new upgrades, future plans and staff accomplishments at UH. Following Dr. Khator, Rushion McDonald, ‘83 UH alumni and 2015 Distinguished Alumni Award recipient gave the keynote speech. McDonald is currently the executive producer for the “Steve Harvey” show.

Each year the list of Cougar 100 businesses is ranked by two-year compound annual revenue growth. The listing celebrates the various companies success and gives Cougars a point of achievement to share with the entire community.

Pannell Kerr Forster of Texas, P.C. (PKF Texas) are the official accountants for the Cougar 100.

Click here to see the full Cougar 100 list