Accounting & Audit
The accounting rules for reporting stock compensation have been expanded. They now include share-based payments to nonemployees for providing goods and services, under recent guidance issued by the Financial Accounting Standards Board (FASB). Old rules Under existing U.S. Generally Accepted Accounting Principles (GAAP), the FASB requires businesses that give stock awards to independent contractors or…
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Like most businesses, you’ve probably experienced a significant increase in the number of customers who prefer to make cashless payments. And you may be wondering: How does the acceptance of these types of transactions affect the auditing of your financial statements? Cashless transactions require the exchange of digital information to facilitate payments. Instead of focusing…
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Private companies that follow U.S. Generally Accepted Accounting Principles (GAAP) must comply with the landmark new revenue recognition standard in 2019. Many private company CFOs and controllers report that they still have significant work to do to meet the demands of the sweeping rules. If you haven’t started the implementation process, it’s time to get…
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The M&A market was hot last year, and that momentum is expected to continue in 2019. Before acquiring another business, however, it’s important to do your homework. Conducting comprehensive due diligence can be a daunting task, especially if you’ve never negotiated a deal before. So, consider seeking input from an experienced accounting professional. Reviewing historical…
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Business owners sometimes mistakenly equate profits with cash flow. Here’s how this can lead to surprises when managing day-to-day operations — and why many profitable companies experience cash shortages. Working capital Profits are closely related to taxable income. Reported at the bottom of your company’s income statement, they’re essentially the result of revenue less the…
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The Financial Accounting Standards Board (FASB) recently gave private companies long-awaited relief from one of the most complicated aspects of financial reporting — consolidation of variable interest entities (VIEs). Here are the details. Old rules Accounting Standards Codification (ASC) Topic 810, Consolidation, was designed to prevent companies from hiding liabilities in off-balance sheet vehicles. It…
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So, you’re about to merge with another company. What’s next? The integration process typically starts with audited financial statements that reflect the results and financial position of the combined entity. This exercise requires a close partnership between the external audit team and in-house accounting personnel from both companies. Collaboration is key to a seamless transition.…
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As year end approaches, it’s time for calendar-year entities to perform physical inventory counts. This activity is more than a compliance chore. Proactive companies see it as an opportunity to improve operational efficiency. Inventory basics Under U.S. Generally Accepted Accounting Principles (GAAP), inventory is recorded at the lower of cost or market value. There are…
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Accurate overhead allocations are essential to understanding financial performance and making informed pricing decisions. Here’s guidance on how to estimate overhead rates to allocate these indirect costs to your products and how to adjust for variances that may occur. What’s included in overhead? Overhead costs are a part of every business. These accounts frequently serve…
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Investors, lenders and other stakeholders have been vocal in recent years about pushing companies to provide more information in their financial reports about cybersecurity. Could your company do a better job disclosing cyberrisks and recent hacks? Most public companies could do better, according to recent testimony during congressional hearings by Jay Clayton, Chairman of the…
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