Businesses and non-profit entities capitalize machines, furniture, buildings, and other property, plant, and equipment (PPE) assets on their balance sheets. Here is a refresher on some common questions about how to properly report these long-lived assets under U.S. Generally Accepted Accounting Principles (GAAP). What is included...
Auditing standards require a year-end risk assessment. One potential source of risk may be a small business’ reliance on the owner and other critical members of its management team. If a so-called ‘key person’ unexpectedly becomes incapacitated or dies, it could disrupt day-to-day operations, alarm...
The Consolidated Appropriations Act (CAA), signed into law on December 27, 2020 includes a variety of economic relief measures. One such measure allows certain banks and credit unions to temporarily postpone implementation of the controversial current expected credit loss (CECL) standard. Here are the details. Updated...
Planning for what lies ahead is an important part of running a healthy business. Forecasting your company’s financial statements can help you manage inventory and other working capital accounts, offer competitive prices, identify impending cash flow shortages, and keep your business on solid financial footing. No...
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...
Each year, public companies must assess the effectiveness of their internal controls over financial reporting (ICFR) under Section 404(a) of the Sarbanes-Oxley Act (SOX). In some cases, private companies should follow suit. In addition, a public company’s independent auditors are generally required to provide an attestation...
It is 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. Benchmarking Historical financial statements can be used...
As your company plans for the coming year, management should assess your strengths, weaknesses, opportunities, and threats (SWOT). A SWOT analysis identifies what you are doing right (and wrong) and what outside forces could impact performance in a positive (or negative) manner. A current assessment...
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 is how you can...
As year end approaches, it is a good idea for calendar-year entities to review the guidelines for recognizing revenue and expenses. There are specific rules regarding accounting cutoffs under U.S. Generally Accepted Accounting Principles (GAAP). Strict observance of these rules is generally the safest approach. The...