balance sheet

Audit disclosures: Why the fine print is important

Footnotes appear at the end of a company’s audited financial statements. These disclosures provide insight into account balances, accounting practices and potential risk factors — knowledge that’s vital to making well-informed lending and investing decisions. Here are examples of key risk factors that you might unearth by reading between the lines in a company’s footnotes.…

Read More

Private companies: Are you on track to meet the 2022 deadline for the updated lease standard?

Updated accounting rules for long-term leases took effect in 2019 for public companies. Now, after several deferrals by the Financial Accounting Standards Board (FASB), private companies and private not-for-profit entities must follow suit, starting in fiscal year 2022. The updated guidance requires these organizations to report — for the first time — the full magnitude…

Read More
fair value accounting

What’s “Fair Value” in an Accounting Context?

In recent years, the accounting rules for certain balance sheet items have transitioned from historical cost to “fair value.” Examples of assets that may currently be reported at fair value are asset retirement obligations, derivatives and intangible assets acquired in a business combination. Though fair value may better align your company’s financial statements with today’s…

Read More
Liabilities for unused time off mount as pandemic lingers

Liabilities for Unused Time Off Mount as Pandemic Lingers

During the pandemic, many employees have postponed using their allotted paid time off until COVID-related restrictions are lifted and safety concerns subside. This situation has caused an increase in accruals for certain employers. Here’s some guidance to help evaluate whether your company is required to report liabilities for so-called “compensated absences” and, if so, how…

Read More
loan

Financial Keys to Securing a Commercial Loan

Does your business need a loan? Before contacting your bank, it’s important to gather all relevant financial information to prove your business is creditworthy. By anticipating information requests, you can expedite the loan application process and improve your chances of approval. Lenders love GAAP  U.S. Generally Accepted Accounting Principles (GAAP) is a collection of specific…

Read More
Accounting for property, plant and equipment (PPE) assets

Accounting for Property, Plant and Equipment (PPE) Assets

Businesses and nonprofit entities capitalize machines, furniture, buildings, and other property, plant and equipment (PPE) assets on their balance sheets. Here’s a refresher on some common questions about how to properly report these long-lived assets under U.S. Generally Accepted Accounting Principles (GAAP). What’s included in book value? PPE is reported on the balance sheet at…

Read More
collections red flags

Red Flags of Deadbeat Debtors

Unfortunately, many businesses have experienced problems with collections during the COVID-19 pandemic. Accounts receivable are a major item on most companies’ balance sheets. Slow-paying — or even nonpaying — customers or clients adversely affect cash flow. Proactive measures can help identify collections issues early and remedy them before they spiral out of control. Recognize the…

Read More
financial statements

Put Your Company’s Financial Statements to Work for You

It’s almost time for calendar-year businesses to prepare their year-end financial statements. If used correctly, these reports can be a valuable management tool. Use them in benchmarking and forecasting to be proactive, not reactive, to market changes. 1. Benchmarking Historical financial statements can be used to evaluate the company’s current performance vs. past performance or…

Read More
inventory counts

How COVID-19 Could Impact Year-End Inventory Counts

Many businesses are closed or are limiting third-party access as COVID-19 surges across the United States. These restrictions could still be in place at year end — a time when external auditors traditionally observe physical inventory counts for calendar-year entities. Here’s how you can identify and overcome the challenges associated with inventory counts during the…

Read More
new accounting rules on leasing vs. buying

Lease or Buy? Changes to Accounting Rules May Change Your Mind

The accounting rules for reporting leasing transactions are changing. Though these changes have been delayed until 2021 for private companies (and nonprofits), it’s important to know the possible effects on your financial statements as you renew leases or enter into new lease contracts. In some cases, you might decide to modify lease terms to avoid…

Read More