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Fixed Asset Tracking: Why Software is Important

It may seem relatively simple at first to track your assets using an Excel spreadsheet and a couple of formulas to calculate depreciation. How could this create issues down the road? As your business grows, and more assets are acquired, the accuracy of your asset valuation could be steadily decreasing. There are multiple vulnerabilities associated …

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Changes to Requirements for Reporting Discontinued Operations

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity that changed the requirements for reporting discontinued operations. Under the new standards, a disposal of …

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Being Aware of Your Debt Covenants

When companies are approved for a bank loan or line of credit, the loan agreement often contains certain affirmative and negative debt covenants. Debt covenants are conditions that the borrower must comply with in order to adhere to the terms of the loan agreement. Essentially, debt covenants bind a business to specific types of behavior …

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Developing a Chart of Accounts

Often, I receive a request from new businesses for a sample chart of accounts.  While each chart of accounts is customized to that business, there are a few best practices that I communicate to my clients. When creating a new chart of accounts, you want to keep it simple and easy to use but also …

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Segregation of Duties: Cash

One very important area to focus your efforts on maintaining segregation of duties is within the cash cycle. See below for important areas you may wish to make sure you have adequate segregation of duties within. In regards to processing cash receipts, one should be sure there is adequate segregation of duties among those who: …

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How to Implement “Step 0” of the New Goodwill Impairment Testing Standards

The Financial Accounting Standards Board (FASB) issued new guidance that is aimed to make goodwill impairment testing easier for companies, and this guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. How will the new standard impact my company?  The new standard modifies the previous …

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3 Ways to Prepare for Your Audit

As we step into a new year, it is time to begin preparations for your upcoming audit. Here are 3 ways to make the experience as smooth as possible. 1. Communicate – While communication is always important, it is especially crucial to establish expectations early with the auditors.  Oftentimes, the auditors will contact the client with …

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Arizona’s Requirements for Reporting Unclaimed Property

It is common as an accountant to see a business void an un-cashed check after a while or to write off an over-payment from a customer who hasn’t returned in a couple years.  It seems that few people know that it is required by Arizona law to report and remit unclaimed property to the Arizona …

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Segregation of Duties: Inventory and Cost of Sales

Proper segregation of duties is an essential element of your company’s internal control. Previously, we wrote about segregation of duties for the accounts receivable and sales process. Those were great for reducing the risk of error or fraud within your organization related to the handling of sales and accounts receivable stand point. How are you …

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Accounting for a capital lease: lessee’s perspective

Leasing equipment continues to be an attractive option for many companies compared to buying equipment outright. After going through the decision process of leasing new equipment, do you know how to account for it? The first question you should ask is “What type of lease is it?” Is it a capital lease or an operating lease? There are …

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