Tool innovation shows cultural evolution at work among chimpanzees

first_imgChimpanzees in the wild have long been known to use a balled-up wad of leaves as a sponge to soak up water to drink.In 2011, researchers in Uganda observed chimps using a fistful of moss instead of leaves — and noted that the practice of “moss-sponging” was spreading throughout the chimp community.The sudden emergence and then rapid spread of this new tool leads researchers to believe that chimpanzees are capable of cultural evolution.Deforestation and hunting threaten chimpanzees with extinction, and may make it more difficult for cultural innovations to spread. Imagine traipsing through a forest, growing thirsty, and stumbling on a small pool of water in the knot of a log. How would you drink it? If you had a straw, you might use that. A dipper cup would be handy. Or perhaps a sponge?Faced with this situation, wild chimpanzees employ a technique called leaf-sponging: they scrunch a ball of leaves in one hand, dip it in the water, and wring it out into their mouth. But a recent paper in Proceedings of the Royal Society B: Biological Sciences shows that chimpanzees in Uganda have developed a new technique of sponging — and are passing it along via social learning.On a November day in 2011, scientists watched an eastern chimpanzee (Pan troglodytes schweinfurthii) from the Sonso chimp community in Uganda’s Budongo Forest employ a new technique at a mineral-rich clay pit. Instead of leaves, the great ape sponged water with a ball of moss. Over the next week, seven other chimpanzees started moss-sponging. The behavior continued to spread, first through the Sonso community and then to members of the neighboring Waibira community, which has an overlapping range.The new study asks why moss-sponging spread when so many other chimpanzee innovations — such as unplugging a nostril with a stick, eating algae, digging for water in the dry season, making noise with a blade of bamboo grass, and washing the skins of consumed prey — remain isolated occurrences.Both of these sponges were made by eastern chimpanzees during the study. On the left is a leaf-sponge made of Alchornea floribunda, a tool common to all wild chimpanzees. On the right is a moss-sponge made of Orthostichella welwitschii, a novel technology first observed in 2011 and now spreading through social learning. Image by Noémie Lamon.Prior to 2011, leaf-sponges were the only tools Sonso chimpanzees used to forage. For years scientists had provided opportunities for the chimps to develop stick tools, but it never happened. The researchers theorized that stick tools may have been too far outside Sonso cultural knowledge. That’s why the observation of moss-sponging was so remarkable.“Seeing the chimps using a new type of tool in 2011 was absolutely amazing,” said Thibaud Gruber, co-author of the study and a primatologist at the University of Geneva and the University of Oxford. “Especially because it’s so rare in wild chimps.”In the dry seasons of 2014 and 2015, the researchers prepared an experiment to determine whether moss-sponging was truly a new cultural practice gained through social learning, or merely a spontaneous behavior invented whenever moss was available.In the experiment, the researchers placed an artificial log containing pools of rainwater in the path of Sonso chimpanzees. Next to one pool, the scientists laid a clump of moss. Next to the other, a handful of leaves.At first, the chimpanzees ignored both materials.“The few first trials, they just put their fingers in the hole and licked the water out of their fingers,” said Noémie Lamon, lead author of the study and an ethologist at the University of Neuchâtel in Switzerland. But eventually the experiment paid off.“The first time I saw a chimp manufacturing a moss-sponge, I could have cried,” Lamon said. “Hours of walking with all the material and a big wooden log and finally results!”Karibu, a member of the Sonso chimpanzee community in Uganda, extracts rainwater from the moss-sponge in her mouth. In a recent study, scientists found moss-sponges to be both more absorbent and quicker to use than the old technology, leaf-sponges. Image by Cat Hobaiter.The scientists labeled each chimpanzee as either a “moss-sponger” or a “leaf-sponger” based on observed behaviors prior to the experiment. Twenty chimpanzees made sponges to drink from the artificial log during the study. Of these, half used moss and half leaves.As predicted, chimpanzees known to use moss previously were more likely to make moss-sponges during the experiment: seven of the nine moss-spongers chose moss. Surprisingly, though, three of the leaf-spongers also used moss.It’s unclear how these three leaf-spongers knew to use moss. Although it’s possible these chimps recognized the value of moss spontaneously, the scientists are not convinced.“The most likely explanation, in our view,” they wrote in the Proceedings paper, “is that these three individuals had acquired the moss-sponging behaviour prior to the experiment, but never showed it during observer presence.”The scientists say these results are evidence that moss-sponging is neither an innate trait nor a spontaneous invention, but a learned ability. It spreads through social learning, where a chimpanzee observes and imitates another chimp, adding the new behavior to her repertoire.But why, when so many chimpanzee innovations occur once and disappear, did this one take hold and spread?“Our guess was that moss-sponges were more efficient than leaf-sponges,” Gruber said.Comparing the two materials, scientists found that moss-sponges absorbed more rainwater and took less time to make and use. This suggests that chimpanzees, like humans, can evaluate their material culture and choose the most efficient technology, according to the researchers.“This is particularly important because it shows that a new tradition can be picked over an old one (leaf-sponging), which may subsequently disappear,” Gruber wrote in an email. “This is cultural evolution in the making in chimpanzees.”Karibu uses a moss-sponge she made to sip water from a small rainwater pool. Scientists say the recent emergence and spread of this socially learned behavior is evidence of cultural evolution in chimpanzees. Image by Cat HobaiterOn an October day in 1960, Jane Goodall famously witnessed a chimpanzee fishing for termites with a stripped twig. Humans, previously considered the only organism capable of making and using tools, were forced to reconsider the definition of our own species. Now, the Sonso chimpanzees’ moss-sponging once again challenges our understanding of humanity. Not only do chimpanzees have culture, but their culture evolves — another trait once considered uniquely ours.“By just watching them, they can tell us so much about themselves, but also ourselves,” Gruber said. “Whatever we find in them and in us was likely already present in our last common ancestor.”Chimpanzees, along with bonobos (Pan paniscus), are humans’ closest relatives. But if chimpanzees continue down the road to extinction (they’re listed as endangered by the IUCN due to habitat loss and hunting), this window into our past will close. The fragmentation of chimpanzee communities due to deforestation could already be inhibiting the kind of cultural evolution observed in this study. According to the IUCN there are around 5,000 chimpanzees in Uganda.“We have yet to discover a lot about chimp cultures, but chimps are losing their habitat and some cultures may disappear before we even have the chance to document them,” Gruber said.He added he hoped exciting new science about chimpanzees would inspire greater public support for conservation. Stripped twigs and moss-sponges may be only the tip of the iceberg when it comes to what chimpanzees can still teach us about the origins of culture.CITATION:Lamon, N., Neumann, C., Gier, J., Zuberbühler, K., & Gruber, T. (2018). Wild chimpanzees select tool material based on efficiency and knowledge. Proceedings of the Royal Society B: Biological Sciences, 285(1888). http://doi.org/10.1098/rspb.2018.1715FEEDBACK: Use this form to send a message to the author of this post. If you want to post a public comment, you can do that at the bottom of the page. Animals, Apes, Archive, Biodiversity, Chimpanzees, Conservation, Deforestation, Endangered Species, Environment, Great Apes, Interns, Mammals, Primates, Rainforest Animals, Wildlife Popular in the CommunitySponsoredSponsoredOrangutan found tortured and decapitated prompts Indonesia probeEMGIES17 Jan, 2018We will never know the full extent of what this poor Orangutan went through before he died, the same must be done to this evil perpetrator(s) they don’t deserve the air that they breathe this has truly upset me and I wonder for the future for these wonderful creatures. So called ‘Mankind’ has a lot to answer for we are the only ones ruining this world I prefer animals to humans any day of the week.What makes community ecotourism succeed? In Madagascar, location, location, locationScissors1dOther countries should also learn and try to incorporateWhy you should care about the current wave of mass extinctions (commentary)Processor1 DecAfter all, there is no infinite anything in the whole galaxy!Infinite stupidity, right here on earth.The wildlife trade threatens people and animals alike (commentary)Anchor3dUnfortunately I feel The Chinese have no compassion for any living animal. They are a cruel country that as we knowneatbeverything that moves and do not humanily kill these poor animals and insects. They have no health and safety on their markets and they then contract these diseases. Maybe its karma maybe they should look at the way they live and stop using animals for all there so called remedies. DisgustingConservationists welcome China’s wildlife trade banThobolo27 JanChina has consistently been the worlds worst, “ Face of Evil “ in regards our planets flora and fauna survival. In some ways, this is nature trying to fight back. This ban is great, but the rest of the world just cannot allow it to be temporary, because history has demonstrated that once this coronavirus passes, they will in all likelihood, simply revert to been the planets worst Ecco Terrorists. Let’s simply not allow this to happen! How and why they have been able to degrade this planets iconic species, rape the planets rivers, oceans and forests, with apparent impunity, is just mind boggling! Please no more.Probing rural poachers in Africa: Why do they poach?Carrot3dOne day I feel like animals will be more scarce, and I agree with one of my friends, they said that poaching will take over the world, but I also hope notUpset about Amazon fires last year? Focus on deforestation this year (commentary)Bullhorn4dLies and more leisSponsoredSponsoredCoke is again the biggest culprit behind plastic waste in the PhilippinesGrapes7 NovOnce again the article blames companies for the actions of individuals. It is individuals that buy these products, it is individuals that dispose of them improperly. If we want to change it, we have to change, not just create bad guys to blame.Brazilian response to Bolsonaro policies and Amazon fires growsCar4 SepThank you for this excellent report. I feel overwhelmed by the ecocidal intent of the Bolsonaro government in the name of ‘developing’ their ‘God-given’ resources.U.S. allocates first of $30M in grants for forest conservation in SumatraPlanet4dcarrot hella thick ;)Melting Arctic sea ice may be altering winds, weather at equator: studyleftylarry30 JanThe Arctic sea ice seems to be recovering this winter as per the last 10-12 years, good news.Malaysia has the world’s highest deforestation rate, reveals Google forest mapBone27 Sep, 2018Who you’re trying to fool with selective data revelation?You can’t hide the truth if you show historical deforestation for all countries, especially in Europe from 1800s to this day. WorldBank has a good wholesome data on this.Mass tree planting along India’s Cauvery River has scientists worriedSurendra Nekkanti23 JanHi Mongabay. Good effort trying to be objective in this article. I would like to give a constructive feedback which could help in clearing things up.1. It is mentioned that planting trees in village common lands will have negative affects socially and ecologically. There is no need to even have to agree or disagree with it, because, you also mentioned the fact that Cauvery Calling aims to plant trees only in the private lands of the farmers. So, plantation in the common lands doesn’t come into the picture.2.I don’t see that the ecologists are totally against this project, but just they they have some concerns, mainly in terms of what species of trees will be planted. And because there was no direct communication between the ecologists and Isha Foundation, it was not possible for them to address the concerns. As you seem to have spoken with an Isha spokesperson, if you could connect the concerned parties, it would be great, because I see that the ecologists are genuinely interested in making sure things are done the right way.May we all come together and make things happen.Rare Amazon bush dogs caught on camera in BoliviaCarrot1 Feba very good iniciative to be fallowed by the ranchers all overSponsoredcenter_img Article published by Isabel Estermanlast_img read more

NBA: Thumb surgery to sideline Chris Paul six to eight weeks

first_imgAnne Curtis talks about renewing faith in God amid the world’s ‘noise and clutter’ If the timeline for his return is accurate, he will miss 17 to 26 games.Paul, a nine-time NBA All-Star, is averaging 17.5 points, 9.7 assists and 5.3 rebounds this season and leads the NBA with 2.25 steals per game.FEATURED STORIESSPORTSEnd of his agony? SC rules in favor of Espinosa, orders promoter heirs to pay boxing legendSPORTSBreak new groundSPORTSMcGregor blasts Cerrone in 40 seconds in UFC returnPaul’s 2015-16 season ended when he suffered a broken right hand in the first round of the playoffs against Portland.Raymond Felton started several games at point guard when Paul was sidelined earlier this season, and Wesley Johnson and Jamal Crawford also started games in Paul’s absence. Don’t miss out on the latest news and information. Bulacan inmates, jail guards raise donations for Taal victims Ben&Ben, IV of Spades, SB19 win big at 5th Wish Music Awards MOST READ LATEST STORIES Motorcycle taxis ‘illegal’ starting next week — LTFRB board member Chris Paul #3 of the LA Clippers knocks the ball away from Russell Westbrook #0 of the Oklahoma City Thunder during the first half at Staples Center on January 16, 2017 in Los Angeles, California. Harry How/Getty Images/AFPLos Angeles Clippers point guard Chris Paul will have surgery to repair a torn ligament in his left thumb and will be sidelined six to eight weeks, the NBA team said Tuesday.Paul was injured in the second quarter of the Clippers’ 120-98 victory over Oklahoma City when he collided with Thunder star Russell Westbrook. The initial diagnosis was a sprained thumb, but an MRI exam on Tuesday revealed the more serious injury.ADVERTISEMENT DILG to lock shops in Tagaytay City, other areas near Taalcenter_img Panelo: Duterte only wants to emulate strong political will of Marcos Marcos monument beside Aquino’s stirs Tarlac town Palace: Crisis over ABS-CBN franchise unlikely Yaya Toure rejected huge China offers — reports The Clippers host the Minnesota Timberwolves on Thursday before setting off on a three-game road trip that takes them to Denver, Atlanta and Philadelphia.Sports Related Videospowered by AdSparcRead Next Filipinos turn Taal Volcano ash, plastic trash into bricks PLAY LIST 01:40Filipinos turn Taal Volcano ash, plastic trash into bricks01:32Taal Volcano watch: Island fissures steaming, lake water receding02:14Carpio hits red carpet treatment for China Coast Guard02:56NCRPO pledges to donate P3.5 million to victims of Taal eruption00:56Heavy rain brings some relief in Australia02:37Calm moments allow Taal folks some respite View comments Luis Manzano jokes about Mikee Morada’s proposal to Alex Gonzaga: ‘Baka nagtali lang ng sintas’last_img read more

‘He gets you goals’, Defoe’s former England team-mate tells talkSPORT

first_imgJermain Defoe has been praised by a former England team-mate for his adaptability and goalscoring record for club and country over the years.The Sunderland striker is expected to earn his 56th cap for the Three Lions by starting their World Cup qualifier with Lithuania at Wembley and it will be his first international appearance in three-and-a-half years.The 34-year-old has been in excellent form for the struggling Black Cats this season, scoring 14 and assisting two goals in 31 appearances, and was rewarded with a call-up from Gareth Southgate.“When you are talking about goalscorers, Jermain Defoe’s name always pops up in the argument,” Emile Heskey told the Weekend Sports Breakfast of his former international team-mate.READ MORE: England team LEAKED! Reported Three Lions line-up for Lithuania clash – Defoe and Oxlade-Chamberlain to start“He’s one of those players you know can get you goals.“When he was younger he used to play alongside a big target man but now with formations changing he is playing up front on his own. Taking that in, he still manages to get goals.”Listen to Emile Heskey on the Weekend Sports Breakfast, above…last_img read more

Constitution Day marked

first_imgFor more information, call (800) 410-8354.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! SIMI VALLEY – Special activities are scheduled today and Monday at the Ronald Reagan Presidential Library and Museum, including an old-fashioned quilting bee and activities in observance of Constitution Day. Constitution Day, recognizing the signing of the U.S. Constitution on Sept. 17, 1787, is actually today, but the museum’s observance is scheduled from 10 a.m. to 5 p.m. Monday, including quiz games for students and awards to those who write the most thoughtful suggestions for amending the Constitution. At 11 a.m. Monday, the museum will present a video of Colin Powell reciting the preamble to the Constitution. Visitors will be able to view a copy of the document and sign a parchment scroll with a quill pen to signify ratification. The quilting bee will be held from 10 a.m. to 4 p.m. today involving the sewing of four large quilts made from quilting squares children decorated at the library’s annual July 4 celebration. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREThe joys and headaches of holiday travel: John PhillipsThe quilts will be placed on display in the library’s Air Force One Pavilion. Sewers from the Simi Valley Quilt Guild and the Conejo Valley Quilter’s Guild will join forces to produce the four quilts. There is no charge to watch the quilting bee, but the Constitution Day activities will be inside the museum’s exhibits, so regular admission fees will apply to those festivities. General admission to the museum is $12, or $9 for seniors 62 and older, $3 for children 11-17, and free for children 10 and under. The library is at 40 Presidential Drive and is open daily from 10 a.m. to 5 p.m. last_img read more

Brighton v Coventry City live stream and confirmed teams

first_imgBrighton face Coventry, who are the lowest ranked team left in the FA Cup, for a place in the quarter-finals of the competition. YOU CAN LISTEN TO BRIGHTON V COVENTRY ON TALKSPORT 2 AT 3PM. CLICK HERE TO LISTEN LIVE ONLINE This is the first time the two sides have played each other since December 2011 and the home side have only won one of their last nine games against their League Two opponents. So how do both sides line up? Scroll down to see the confirmed teams…Brighton & Hove Albion XI: Krul, Bruno, Goldson, Huenemeier, Suttner, Knockaert, Kayal, Stephens, March, Locadia, UlloaSubs: Maenpaa, Rosenior, Izquierdo, Propper, Dunk, Baldock, Hemed Coventry City XI: Burge, Grimmer, Willis, Hyam, Haynes, Shipley, Kelly, Bayliss, Barrett, McNulty, Clarke-HarrisSubs: O’Brien, Di. Kelly-Evans, McDonald, Stoke, Vincenti, Biamou, Ponticelli Both teams are looking for a place in the quarter-finals 1last_img read more

Livingston hold firm to grab point against Celtic

first_imgNewly-promoted Livingston held firm to grab a point in a goalless draw against champions Celtic.Brendan Rodgers’ side came into the match having scored 23 goals in their last five domestic contests and earned a crucial win in Europe on Thursday.But they were unable to breakdown a resolute home defence at the Tony Macaroni Arena.Waves of Celtic pressure were batted away by the impressive Lions rearguard, who have only shipped four goals since conceding three at Parkhead on the opening day. The draw still sees the Hoops, who have a game in hand on their rivals, go top of the league on goal difference after previous leaders Hearts were beaten by Kilmarnock on Saturday.last_img

Compliance: Manufacturing is not Exempt

first_imgRegulatory compliance has hit hard not just the white-collar world of corporate finance and financial services but also manufacturing. In particular there are now numerous guidelines and requirements around handling and tracking of hazardous materials contained in new products.Manufacturers are required to develop processes that monitor and make detailed reports about their products with these materials. Governments in Europe, California, Korean and even China are creating strict guidelines.In Europe, fines can be particularly severe. Violations of the EU’s Restriction of Hazardous Substances Directive (RoHS) and Waster Electrical Equipment Directive (WEEE)can result in millions of dollars of fines and bans on product sales that in turn can cost companies millions.Original Equipment Manufacturers (OEMs) at the top of the food chain are subject to the greatest fines, but companies in the supply chain handling the product, especiallyTier 1 suppliers of the OEMs can also face large fees. The regulations put into effect a process for verification and certification of compliance.The task of tracking the origin and makeup of all parts and components going into the manufacture of a single product can become extremely complex. Many products consist of hundreds and thousands of diversely sourced parts. OEMs have the onus of both ensuring and proving that they are under compliance can be challenging.To help give OEM manufacturers and Tier 1 suppliers a handle on compliance, PLM products are bulking up with functionality that allows them to track material compliance.Material compliance data integrated with all product, cost, and marketing requirements create a single dashboard from which users can see on overall view that includes production functionality, and environmental and cost impacts. The end result is more efficient production, avoidance of compliance violations and increased overall customer sataisfaction. Mike Zepp, Director of Material Compliance Solutions at Dassault Systemes said:“Linking material and chemical substance compliance data to all product lifecycle processes enables OEMs and Tier 1 suppliers to gain full product regulatory compliancevisibility across their organization and supply chain. This will help to drive hazardous substances out of products, and avoid a litany of problems, such as slower time-to-market, product recalls, potential fines, product bans, poor customer satisfaction and possibly a damaged public image.”last_img read more

Internet of Things (IoT) Security Spending: Revenues up as Worries about Security Abound

first_imgSpending globally on IoT security is expected to reach $1.5 billion this year as organization worry about the vulnerability of their IoT connected devices, an increase of 28 percent over 2017, says Gartner.The Garner report found that about one-fifth of all organization say that they’ve experience some sort of IoT-based attack over the last thirty-six months.Brian Contos, CISO of Verodin, said that “there are so many IoT device types and vendors that it’s challenging to determine what risks they bring and what levels of controls can be implemented to mitigate that risk.”Ruggero Contu, research director at Gartner, said that “interest is growing in improving automation in operational processes through the deployment of intelligent connected devices, such as sensors, robots and remote connectivity, often through cloud-based services. This innovation, often described as Industrial Internet of Things (IIoT) or Industry 4.0, is already impacting security in industry sectors deploying operational technology (OT), such as energy, oil and gas, transportation, and manufacturing.”last_img read more

How To Get Started With Google+ Hangouts On Air

first_imgjon mitchell On the splash screen for Hangouts, there’s a new checkbox that says Enable Hangouts On Air. A pop-up will warn you that your Hangout will now be broadcast both on Google+ and on your YouTube channel. What do you do now? Well, that’s up to you! Check out some of our ReadWriteWeb Hangouts for inspiration. Here’s our broadcast from last week, in which we talk about the future of video games: Tags:#Google#web Top Reasons to Go With Managed WordPress Hosting Why Tech Companies Need Simpler Terms of Servic… Google has announced today that Hangouts On Air are going worldwide. That means any Google+ user who wants to stream live video to the whole world can do so. Hangouts have always been the killer app for Google+, and this announcement makes them into a truly new broadcast medium. Here’s how to get started.Google’s announcement says that the rollout will happen “gradually, over the next few weeks,” so if you don’t have it yet, be patient. Once you’ve got Hangouts On Air, here’s how to start one.To start a Hangout On Air, click the normal Hangout button on the right sidebar.center_img When you click “Okay, got it!”, you’ll be taken to a big, long terms of service document. It’s the usual. You’re giving Google the right to display your Hangout content all over its properties. Hey, Google’s giving you the ability to broadcast your video to everyone on Earth for free. It’s the least you can do, right?After you agree to the terms, you’re in the Hangout, but it isn’t recording or broadcasting yet. This gives you time to get your participants set up and ready. Once everybody is settled, you click the “Start Broadcast” button in the top right. This will give you one last reminder that your video will be broadcast live to the public and be available on YouTube when you’re done.Once you click “Okay,” the red button starts a 10-second countdown, and then you’re live. You’ll hear a ding when the video starts. The title at the top will switch to “On Air,” and you’ll be able to see the number of live viewers along the top. You can even embed the stream on your own site. A Web Developer’s New Best Friend is the AI Wai… At ReadWriteWeb, we’ve been testing Hangouts On Air for a few months. Things were a little bit rough at first. A glitch when began the Hangout would mess up the whole broadcast, or the saving to YouTube wouldn’t work and we’d lose the show. We understood that we were beta testers, and we were glad to do it, but it was still frustrating.Related: I Google+ Hungout With You And It Wasn’t Even CreepyBut after the Google+ redesign in April, things changed. The controls got easier. YouTube processing happened almost instantly after finishing the broadcast (on a good day). Google has worked out the bugs, and we think Hangouts On Air is ready for everyone. Related Posts 8 Best WordPress Hosting Solutions on the Marketlast_img read more

UNICAP Regs Finalize Modified Simplified Production Method, Treatment of Negative Adjustments, Section 471 Costs; Accounting Method Change Rules Provided (T.D. 9843; Rev. Proc. 2018-56)

first_imgFinal regulations issued under the uniform capitalization (UNICAP) rules adopt a new simplified method (the “modified simplified production method”) for determining additional Code Sec. 263A costs allocable to property produced by a taxpayer or acquired for resale (T.D. 9843). This method is in addition to the current simplified methods. The manner in which certain costs are categorized for purposes of the various simplified methods are redefined and rules for the treatment of negative adjustments in additional Code Sec. 263A costs are provided. A separate revenue procedure allows taxpayers to change their accounting method to comply with these final regulations. The final regulations adopt previously issued proposed regulations with minor changes (REG-126770-06, I.R.B. 2012-38, 347).Modified Simplified Production MethodThe new modified simplified production method adopted by the final regulations allocates additional Code Sec. 263A costs, including negative adjustments, among raw materials, work-in-process, and finished goods inventories on hand at the end of the year. Taxpayers using the new method are not required to separately track direct material costs that are integrated into work-in-process and finished goods inventories. In addition, the types of methods permitted to allocate mixed service costs between pre-production and production additional section 263A costs are expanded. A taxpayer using the new simplified method may also allocate 100 percent of capitalizable mixed-service costs to pre-production or production additional Code Sec. 263A costs if 90 percent or more of the costs would otherwise be allocated to that amount.Additional clarifications to the modified simplified production method provide that:— Additional Code Sec. 263A costs allocable to property produced under a contract and property acquired for resale are included in pre-production additional Code Sec. 263A costs;— Code Sec. 471 costs for property produced under a contract and property acquired for resale are included in pre-production Code Sec. 471 costs; and— Direct material costs include property produced under a contract that are direct material costs when the property is used in an additional production activity of the taxpayer.Definition of Code Sec. 471 CostsThe final regulations provide that for purposes of any of the simplified methods, Code Sec. 471 costs are the types of costs that a taxpayer capitalizes to produced property or inventory in its financial statement. Furthermore, taxpayers must include all direct costs of property produced or acquired for resale in Code Sec. 471 costs regardless of the treatment on a financial statement. A de minimis exception described below applies. Code Sec. 471 costs are determined by reference to the Code Sec. 471 costs incurred during the tax year for federal income tax purposes.The regulations prioritize various types of financial statements for purpose of determining Code Sec. 471 costs.An alternative method of determining Code Sec. 471 costs is provided for taxpayers with an audited financial statement as well as other specified statements that are deemed reliable. Under the alternative method, Code Sec. 471 costs are the costs capitalized to property produced or property acquired for resale in the taxpayer’s financial statement. However, financial statement write-downs, reserves, or other financial statement valuation adjustments are not taken into account in determining Code Sec. 471 costs. The alternative method must be applied consistently to all Code Sec. 471 costs in order to limit potential distortions in the absorption ratios used under the simplified methods. Also, if the alternative method is used, additional Code Sec. 263A costs include all negative adjustments to remove Code Sec. 471 costs, as well as all permitted positive and negative book-to-tax adjustments.De Minimis Safe HarborsThe final regulations provide a de minimis rule that allows a taxpayer using a simplified method to include in additional Code Sec. 263A costs and exclude from Code Sec. 471 costs, direct labor costs that are not capitalized in a taxpayer’s financial statement. The de minimis rule is only available if uncapitalized direct labor costs are less than five percent of total direct labor costs incurred during the tax year. Basic compensation, overtime, and costs included in a taxpayer’s standard cost or burden rate methods used for Code Sec. 471 costs are not covered by the de minimis rule.Another de minimus rule allows taxpayers using a simplified method to include in additional Code Sec. 263A costs and exclude form Code Sec. 471 costs, direct material costs that are uncapitalized on financial statements if the amount of those costs comprise less than five percent of total direct material costs incurred during the tax year.A final de minimis rule allows taxpayers using a simplified method to include in additional Code Sec. 263A costs and exclude from Code Sec. 471 costs, uncapitalized variances and under or over-applied burdens if the sum of these amounts is less than five percent of the taxpayers’s total Code Sec. 471 costs for all items for which the taxpayer uses a standard cost or burden rate method to allocate costs.Negative Adjustments in Additional Section 263A CostsUnder the final regulations, negative adjustments included in additional Code Sec. 471 costs to remove Code Sec. 471 costs are only allowed if a taxpayer uses the simplified production method, the simplified resale method, or the new modified simplified production method. The final regulations impose a consistency requirement mandating that taxpayers that include negative adjustments in additional Code Sec. 263A costs must use this method of accounting for all Code Sec. 471 costs permitted to be removed using negative adjustments. However, certain specified costs such as bribes, lobbying expenses, and fines may not be removed from Code Sec. 471 costs as a negative adjustment.A taxpayer using the simplified production method may include negative adjustments in additional Code Sec. 263A costs only if its average annual gross receipts for the three prior tax years are $50 million or less.Accounting Method ChangesAn accounting method change procedure is also issued in conjunction with the final regulations (Rev. Proc. 2018-56). The procedure grants taxpayers automatic consent to make an accounting method change to comply with the regulations. These changes include, for example, a change to comply with the new definition of section 471 costs, the treatment of negative adjustments, or a change to the new modified simplified production method. Rev. Proc. 2018-31, I.R.B. 2018-22, 637 (TAXDAY, 2018/05/10, I.2), which provides a comprehensive listing of automatic accounting method changes, is modified and amplified to include the changes described in Rev. Proc. 2018-56.Effective Date of Final RegulationsThe final regulations apply to tax years beginning on or after November 20, 2018. The IRS will not challenge return positions consistent with all of the final regulations for any tax year that both begins before November 20, 2018 and ends after November 20, 2018.Rev. Proc. 2018-56T.D. 9843Other References:Code Sec. 263ACCH Reference – 2018FED ¶13,822.80CCH Reference – 2018FED ¶13,829.70CCH Reference – 2018FED ¶13,848.12CCH Reference – 2018FED ¶13,848.15CCH Reference – 2018FED ¶13,848.53Code Sec. 481CCH Reference – 2018FED ¶20,620.285Tax Research ConsultantCCH Reference – TRC ACCTNG: 15,200CCH Reference – TRC ACCTNG: 15,211Login to read more tax news on CCH® AnswerConnect or CCH® Intelliconnect®.Not a subscriber? Sign up for a free trial or contact us for a representative.last_img read more