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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 Kay Filler
•
August 15, 2019

More About Leases (Some Good News!)

Challenges in keeping up with GAAP have never been greater, with pervasive changes in revenue recognition requirements set to hit most private companies this year, to be closely followed next year by getting most leases on the balance sheet for the first time. These confusing standards, along with the usual host of less widespread financial reporting changes, are daunting (to say the least). (more…)

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Categories: Revenue Recognition, The Musings of our Authors, Updates & Alerts
Tags: Accounting Standards Update, GAAP, Leasing Standard, Revenue Recognition,
By Jeff Faust
•
August 6, 2019

Secondary Transactions and 409A Valuations - Part 1: The Potential Impact

As VC-backed companies mature, they may not be ready for an IPO or a sale, but private secondary transactions on common stock are a way to get some liquidity for the founders prior to an exit.

Any secondary transaction with the Company’s common stock should be carefully evaluated to determine the relevance and the potential impact on the common stock price for 409A Valuation purposes.  The AICPA guide: Valuation of Privately-Held-Company Equity Securities Issued as Compensation establishes a clear set of rules regarding this issue. (more…)

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Categories: Summer 2019, Valuation Services
Tags: 409A Valuation, Jeff Faust, Secondary Transactions, VC-backed companies,
By Abraham Livchitz
•
July 24, 2019

California Competes Tax Credit – 2019 Update

The state’s popular California Competes Tax Credit program continues to be available during the 2019-2020 fiscal year. The state has allocated approximately $237 million to be awarded to both small and large business taxpayers. In June, the final award period of last fiscal year, approximately $55 million of tax credits were granted to twenty taxpayers. (more…)

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Categories: The Musings of our Authors, Updates & Alerts
Tags: Abe Livchitz, California Competes Tax Credit, Expanding operations in California, Tax Credit,
By Deepa Bhat
•
March 13, 2019

How Not to Fall Prey to These Common Fraud Schemes

Not too long ago, the Association of Certified Fraud Examiners (ACFE) released their Report to the Nations, a publication on worldwide occupational fraud based on real life fraud cases and it was certainly a telling study in fraud. As an auditor for private companies, it hit very close to home to learn that the median loss experienced by companies with fewer than 100 employees was $200,000! And nearly half of these fraud cases were the result of a lack of internal controls. (more…)

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Categories: The Musings of our Authors, Updates & Alerts
Tags: Anti-Fraud Controls, Deepa Bhat, Fraud Schemes, Occupational Fraud,
By Kay Filler
•
March 1, 2019

Non-Employees Stock Compensation Accounting Aligned with Employee Rules

The recent changes in stock compensation for non-employees will reduce complexity and should also smooth volatility in recognizing associated compensation costs in the income statement. These changes were issued in June 2018 and are first effective for private companies with calendar year 2020, although early adoption is permitted. (more…)

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Categories: The Musings of our Authors, Updates & Alerts
Tags: Share-based awards, Stock awards, Stock compensation,
By Abraham Livchitz
•
February 13, 2019

Tax Reform…. Not in California

UPDATED JULY 18, 2019: At Last…Partial Conformity…

In December 2017, Congress passed the Tax Cuts and Jobs Act (TCJA) which was the most significant tax reform legislation enacted since the 1980s. In July 2019, 18 months later, the California legislature acted and the governor signed Assembly Bill 91 that contained a select number of conformity provisions. These provisions will simplify tax compliance for California taxpayers as differing federal and California tax reporting for certain transactions will no longer be required. Unfortunately, California has yet to conform to most of the changes enacted by the TCJA.

The conformity changes included in AB 91 are highlighted below.

However, in an act of “reverse conformity,” the legislature passed Senate Bill 78. Originally, the federal Affordable Care Act imposed a “penalty tax” on taxpayers who did not have qualifying health insurance coverage. Congress repealed this “tax” effective January 1, 2019. But due to an act of reverse conformity, a “penalty tax” will once again be imposed on California taxpayers that do not have qualifying health insurance, effective January 1, 2020. (more…)

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Categories: Tax Reform, The Musings of our Authors, Updates & Alerts
Tags: Abe Livchitz, California, Tax Cuts and Jobs Act, Tax Reform,
By ASL Guest
•
February 6, 2019

ASC 842 - Leases, the OTHER New ASC

By Patrick Ngai, CPA, Audit Manager
ASL Technology Group

When ASC 842 – Leases (“ASC 842”) was first published in 2016, the effective date for non-public entities was scheduled for 2020.  The date seemed so far away that most people took the, “we will cross that bridge when we come to it” approach.  To be fair, most people were too concerned about the new revenue recognition standard (ASC 606) to worry about anything else.  (more…)

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Categories: The Musings of our Authors, Updates & Alerts, Winter 2019
Tags: ASC 842, Lease Accounting, Leasing Standard, Patrick Ngai,
By Kay Filler
•
January 16, 2019

On the Sunny Side – FINALLY – The Ultimate VIE Accounting Relief!

Way, way back in 2002, the FASB responded to the Enron debacle by issuing the infamous accounting standard referred to as FIN46. While the noble goal was to curtail the ability of companies to keep potential liabilities off their balance sheets (off-balance sheet risks), the pronouncement probably created more angst than any other standard for nonpublic companies. In addition, the requirement to consolidate commonly owned entities that met the definition of a “Variable Interest Entity” with the primary operating entity financial statements often convoluted the financial reporting for users, both internal and third-party. (more…)

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Categories: The Musings of our Authors, Updates & Alerts
Tags: Accounting Standards, variable interest entities,
By ASL Guest
•
December 19, 2018

Top Tech Trends in 2018

By Patrick Ngai, CPA, Audit Manager

About two years ago, I took on a bigger role within the ASL tech group.  On a weekly basis, I scour the internet and look for news and articles that highlight the various subsectors of the technology world.  As we are approaching the end of 2018, I would like to share with you five (plus one bonus) articles that I found the most intriguing.  (more…)

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Categories: The Musings of our Authors
Tags: Artificial Intelligence, Cryptocurrencies, Internet of Things, Patrick Ngai,
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