Life can become a blur when you are devoting so much time to a start-up business or to a new product release. As accountants, our job is to keep recordkeeping as up to date as possible while engineering and marketing move quickly to make sure the product hits the sales window at just the right time. Recordkeeping is especially critical at yearend. Now is a good time to take a minute to make sure all your company’s compliance requirements are being handled. To assist you in this assessment, here is a list of items that should be addressed in the next couple of months to make sure your company’s recordkeeping is maintained at the level expected by investors or other third parties. (more…)
CPAs Talk Tech Biz
To continue the discussion of the ASC 606, Step 2 of the revenue recognition process requires examining what the seller has promised to do for the customer, and if there are multiple promises, whether these promises should be accounted for separately or combined. This examination determines the performance obligations which are the basis for the revenue recognition. (more…)
Revenue recognition is getting a lot of attention since ASC Topic 606 “Revenue from Contracts with Customers” was first issued in 2014. Since that date, we have had several posts on our blog that focus on some of the details and changes related to the new standard. As we get closer to implementation, it is time to take a closer look. (more…)
Selling a business may be a natural progression for your company as discussed in Parts I and II of this series by Senior Tax Manager, Naila Sharifova. As Naila explained, there are tax considerations for your company and shareholders which impact the amount of income generated by the sale. But whether you are selling a startup with intellectual property or you are selling your company as part of your retirement plans, the acquirer will want to review your company’s financial statements to determine what they are willing to pay for your company. (more…)
It is time to revisit the discussion on changes to revenue recognition. Just to recap, the new standard requires that revenue is recognized when goods or services are transferred to a customer and for the amount the seller expects to be entitled, based on the five step process (not necessarily performed chronologically):
- Identify the contract with the customer
- Identify the separate performance obligations
- Determine the transaction price
- Allocate the transaction price to the individual performance obligations
- Recognize revenue as the performance obligations are satisfied
The new standard is effective for privately held companies for annual reporting periods beginning after December 15, 2018, with early adoption allowed for annual reporting periods beginning after December 15, 2016 (calendar year 2017!) (more…)
If you have made it this far, you noticed our refreshed website. As blog authors, we are excited to be part of this new release.
Yesterday, I was in the process of reviewing a unique equity agreement and determining the accounting treatment for the equity awards. The equity being issued was for a start-up that is “going to change the way we communicate.” From my viewpoint, it seems like all the start-ups I work with have that goal – to change the way something is done. Start-ups are determined to change everything, whether it is the way data is stored in the cloud to the way we purchase goods and services. The mindset that there is a better way to do everything is an exciting environment, and ASL is glad to be a part of the changing technology of our world, even if our part (most of the time) is just to help with compliance and reporting. (more…)
The new revenue recognition standard, or ASU 2014-09, was issued in May 2014. As we first started digesting the standard, we posted a blog on the 5-step process of revenue recognition (September 10, 2014 post). Due to the sweeping changes associated with this standard, it became clear early on that implementing the new standard was going to be a process. As a follow-up, we included an implementation update in the blog (March 18, 2015 post) but once again, there are more twists and turns for the newly issued standard.
Have you noticed there are an increasing number of articles on companies reporting non-financial data in conjunction with their annual financial data? Referred to as sustainability reporting, this is not something I see as an auditor of privately held companies. So where do you go to research a topic? Wikipedia, of course! Wikipedia provided this definition: “A sustainability report is an organizational report that gives information about economic, environmental, social and governance performance.”
The converged (FASB/IASB) revenue recognition standard was issued in May 2014, and a week later the Boards announced the formation of the “Joint Transition Resource Group for Revenue Recognition.” Given the pervasiveness of the new revenue recognition standard and, for U.S. constituents, migration to the unfamiliar and uncomfortable territory of “principles” over “rules,” it was apparent from the start that implementation issues would abound.