COVID-19 and continuing as a going concern

Under U.S. GAAP, an entity is presumed to be a going concern until the entity’s liquidation becomes impending. But what exactly does that mean? Going concern signifies that the company is financially stable enough to meet its current obligations and can continue operations for the foreseeable future. Don’t miss: COVID-19 leads to slow moving and …

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COVID-19 leads to slow moving and obsolete inventory

Millions of retailers and manufacturers across the nation have dealt with pandemic shutdowns and capacity restrictions that have not only negatively impacted their bottom line, but also led to an increase in the levels of inventory on hand. Depending on the type of inventory, the aged inventory will likely require special attention and analysis to …

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Did you remember the changes to debt issuance costs?

irIn April 2015, as a part of the FASB’s initiative to simplify and improve accounting standards, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. Why should we care about an Accounting Standards Update issued years ago? Because for privately held companies and not-for-profit organizations, ASU 2015-03 is effective for financial statements …

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FASB revises definition of a business

With its first Accounting Standards Update of 2017 (ASU 2017-01), the FASB revised the definition of a business under U.S. GAAP. This update was issued to provide more clarity to entities in determining whether transactions should be classified as an acquisition (or disposal) of assets or businesses. Stakeholders had communicated to the FASB that the …

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Statement of Cash Flows Updates

On August 26, 2016, the FASB issued Accounting Standard Update 2016-15, Statement of Cash Flows (Topic 230). The new guidance is intended to reduce diversity in practice in how certain cash inflows and cash outflows are presented in the statement of cash flows. This update provides guidance on the following eight topics: Debt prepayment or …

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Applying Useful Lives to Fixed Assets

Selecting useful lives to depreciate fixed assets over can be a difficult task. It is hard to predict how long an asset will last or how long it will be before it becomes obsolete. The answer to this question first depends on the type of asset. A computer, for example, can become obsolete well before …

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The Basics of the Statement of Cash Flows

In our last blog posting, we covered certain non-recurring items that the Emerging Issues Task Force is looking at related to Statement of Cash Flows presentation. Let’s step it back a bit and go over the basics of the Statement of Cash Flows. Who – Financial statement preparers. What – The Statement of Cash Flows …

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Potential Nonprofit Accounting Changes?

Approximately 13,340 nonprofits registered with the state Department of Consumer Protection may be impacted by FASB’s proposed changes to financial reporting. In April, they announced the proposal to change the following items: Income Statement Rule: Requires entities to report net income or loss from operating activities, separate from non-operating activities. Impact: Clearly shows income and …

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FASB’s Employee Benefit Plan Reporting Simplification

On July 31, 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient. The ASU was in …

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Accounting for Software Development Costs

Many companies develop software internally to sell to others. But which costs are research and development expenses and which costs can be capitalized and then amortized? Technological feasibility is what separates these two costs and once determined, dictates the accounting treatment. What is technological feasibility and when does it occur? This occurs when the program …

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