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CPAs Talk Tech Biz

A blog for the owners, founders, and executives of privately held technology companies.
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By ASL Guest
•
October 12, 2021

Are You Ready for the New Lease Accounting Standard?

By Steve Carter, CPA, Principal

The COVID-19 pandemic created unique conditions for businesses in the Bay Area and across California. The combination of forced business closures and stay-at-home orders left many companies in uncharted waters. Some were forced to close while others had to find new ways to deliver products and services to customers. At the same time, many were searching for new lines of credit, business loans, or other ways to access working capital. It was against this backdrop that FASB made the decision to delay the implementation of ASC 842 (new lease accounting rules) by one year, starting with reporting periods after December 15, 2021. Although early adoption was permitted, many decided to delay implementation to focus on pandemic-related issues. As the recovery continues and year-end is just a few months away, businesses need to re-examine the new lease accounting rules to ensure compliance.

On November 10, 2021, the FASB Board decided not to provide a third effective date deferral of Topic 842 for entities within the scope of paragraph 842-10-65-1(b) (generally private companies and certain not-for-profit organizations). (more…)

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Categories: Updates & Alerts
Tags: ASC 842, Finance lease, Lease Accounting, Operating lease, Steve Carter,
By Jeff Faust
•
February 11, 2020

U.K. Share Schemes vs. U.S. Stock Option Plans

ASL’s Valuation Team recently prepared 409A valuations of VC funded biotech companies located in the U.K. We would like to share some insight into U.K. share schemes and compare them to U.S. stock option plans. To start with, in the U.S., they are called plans whereas in the U.K., they are called schemes. (more…)

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Categories: Valuation Services, Winter 2020
Tags: 409A valuations, Jeff Faust, U.K. Share Schemes, U.S. Stock Option Plans,
By ASL Guest
•
February 3, 2020

Planning for the Unexpected

By Patrick Ngai, CPA, Audit Manager

Proactive and careful planning is an essential part of managing a successful Silicon Valley business. Executives often spend the closing months of the year engaged in a comprehensive analysis of business performance and identifying future goals and benchmarks. Typically, this process includes a close look at sales numbers, account management, production timelines, new service/product innovation and budgeting. In addition, time is spent reviewing department performance, conducting individual employee reviews and determining whether it is time to bring additional resources to the table. While all of these are necessary tasks to maintain the vitality of a business, it is important to also dedicate time to planning for the unexpected. Businesses in California need to operate against the backdrop of natural disasters such as earthquakes and wildfires. For this reason, it is imperative to have a disaster recovery plan in place should the unexpected occur. Below is a summary of key planning issues to consider. (more…)

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Categories: The Musings of our Authors
Tags: Cyber security, Disaster recovery planning, Insurance protection, Natural disasters, Patrick Ngai,
By ASL Guest
•
December 16, 2019

2019 Technology Round Up

By Patrick Ngai, CPA, Audit Manager

Here we are, well into the month of December 2019.  It seems like almost yesterday when I wrote the article, Top Tech Trends in 2018.  As they say, time waits for absolutely nobody.  As we prepare to say goodbye to the 2010s as a decade, I would like to take a minute to summarize five technology trends from the past twelve months. (more…)

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Categories: The Musings of our Authors
Tags: Facial recognition, IoT devices, Patrick Ngai, Security breaches, Technology trends, WeWork,
By Deepa Bhat
•
November 20, 2019

Getting Ready for an External Audit? Five Tips to Make the Process Easier on You and Your Auditor

Companies often need financial audits when they seek additional funds or have to satisfy the requirements of owners, creditors, investors and other outside parties who want a higher level of comfort on the accuracy of financial statements.

My experience auditing privately held companies has taught me that a few proactive measures can go a long way in avoiding audit delays, keeping you and your auditor on track, and ensuring a smoother audit process for all. So, let’s jump right into those tips, shall we? (more…)

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Categories: Audit & Accounting Errors, Myths & Guidelines, The Musings of our Authors
Tags: Business processes, Deepa Bhat, External audit, Financial audits,
By Jeff Faust
•
November 6, 2019

Secondary Transactions and 409A Valuations – Part 2: FF Preferred Stock

In Part 1 of this series (Secondary Transactions and 409A Valuations – Part 1: The Potential Impact), we discussed secondary transactions and their impact on 409A Valuations.  To recap, the liquidity that some founders and early employees receive from their company or outside investors, considered secondary transactions, can sometimes re-establish the price per share for stock option grant (409A) purposes at the same price as the secondary transaction.  Secondary transactions are often done in conjunction with a funding round so they are often at the same price as the round’s preferred stock.  If common stock was sold in the secondary transaction, future option grants may have to be granted at this higher price, which is not ideal for new employees receiving options based on the latest preferred stock price. (more…)

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Categories: Valuation Services
Tags: 409A Valuation, ASL Valuation, Jeff Faust, Preferred Stock, Secondary Transactions,
By Kay Filler
•
October 21, 2019

Another Lease Accounting Deferral – and More!

It’s all but official. On October 16th, the FASB voted to approve delays for private companies on three new accounting standards, one of which is Leases. The expected Accounting Standards Update (ASU), on which FASB voting will be the official action to implement the deferrals, is expected in November. By the way, the other two standards deferred under this vote are “credit losses” (or CECL) and “hedging”. As the effective date draws closer, we will certainly be posting about CECL, since some aspects apply to all companies. (more…)

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Categories: The Musings of our Authors, Updates & Alerts
Tags: Accounting Standards, Accounting Update, FASB, Lease Accounting,
By Kay Filler
•
September 19, 2019

To Outsource or Not? That Is the Question

Outsourcing can cover a myriad of business activities, but those most frequently considered are the back-office functions of accounting, IT and Human Resources/Recruiting, especially at micro to mid-sized companies. A quick study of Deloitte’s “Global Outsourcing Survey” for 2016 and 2018 demonstrates the maturation of outsourcing strategy. While these surveys include mostly very large participant companies, it is clear that outsourcing is now seen as a vehicle for significant strategic advantage by “buying” available capabilities to realize advantages faster than developing strategic “assets”. (more…)

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Categories: The Musings of our Authors
Tags: Artificial Intelligence, Outsourcing, Robotic Process Automation, Silicon Valley labor market,
By Kay Filler
•
September 3, 2019

AI in Accounting – Embracing a Brave New World!

Well…it’s all but HERE! For those of you who were hoping it wouldn’t come, it is best to switch gears and consider how to best harness the change to your advantage. The alternative is to risk being left behind in a world where accountants become less known for routine detailed tasks and are more often thought of as insightful, intuitive and forward-thinking strategic assets.

Sound like hyperbole? Read on… (more…)

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Categories: The Musings of our Authors, Updates & Alerts
Tags: Artificial Intelligence, Machine Learning, Natural Language Processing,
Next Entries

Categories

  • Updates & Alerts
  • Valuation Services
  • Winter 2020
  • The Musings of our Authors
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  • Summer 2019
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Authors

  • Abraham Livchitz
  • ASL Guest
  • Carol Wagner
  • Deepa Bhat
  • Jeff Faust
  • Jyothi Chillara
  • Kay Filler
  • Michael McAndrews
  • Naila Sharifova
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