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3Ed_CCH_Forensic_Investigative_Accounting_Ch12-1 - Forensic...

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Unformatted text preview: Forensic and Investigative Accounting Forensic Chapter 12 Computing Economic Damages © 2007 CCH. All Rights Reserved. 4025 W. Peterson Ave. Chicago, IL 60646-6085 1 800 248 3248 www.CCHGroup.com Measuring Damages in Personal Cases Damage calculations that require additional knowledge and skills (other than those used in commercial damages), include: Wrongful death. Wrongful discharge. Complete or partial disabilities. Similar situations that take into account the Similar economic value of persons. economic Chapter 12 Forensic and Investigative Accounting 2 Issues that Impact Amount of Damages Issues in a Personal Injury Case in For a person who has sustained permanent work-related For disabilities, the issues that impact the amount of damages that will accrue to the injured person over his or her remaining lifetime include: remaining How long will the person live? What level of injuries were sustained? What is the impact of those injuries on the What employee’s remaining work effort and abilities to perform services outside of the workplace? perform Chapter 12 Forensic and Investigative Accounting 3 Calculation of Economic Damages in a Calculation Personal Injury Case Personal For a person who sustains permanent work-related disabilities, the calculation of economic damages would be based on a variety of issues, including: What are the characteristics of that person’s work What life? life? What is the employee’s educational background? What is the employee’s gender? What is the employee’s expected time left in the What work force? work Forensic and Investigative Accounting 4 Chapter 12 Measuring Economic Damages in a Measuring Wrongful Discharge Case Wrongful Commonly used components for measuring economic Commonly damages in a wrongful discharge case include: damages Lost wages: – Earnings history – Earnings estimates – Royalties – Fringe benefits Lost profits. FICA tax payments that employer would have paid. Health insurance premiums that employer would have paid. Forensic and Investigative Accounting 5 Chapter 12 Common Components of Fringe Benefits Paid health care. Life insurance. Education programs. Payroll taxes (FICA taxes, federal and state Payroll unemployment taxes, workers’ compensation taxes). taxes). Chapter 12 Forensic and Investigative Accounting 6 Measuring Damages for Measuring Household Services Household What amount of services did the person in What question provide before the event that caused the loss? caused What amount of services can the person in What question provide after the event? What percent of services was lost? percent What is the “value” of the lost services? Chapter 12 Forensic and Investigative Accounting 7 Examples of Job-Related Costs Job-related costs are costs that employees Job-related incur as the result of their employment. Some examples include: examples Cost of commuting to work. Union dues. Professional fees. Job-related clothing costs. Chapter 12 Forensic and Investigative Accounting 8 ...
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