From category archives: Boulay

Assurance

Custody Examinations

For nearly 80 years, Registered Investment Advisers (RIAs) have been subject to the "custody rule" [rule 206(4)-2] under the Investment Advisers Act of 1940, which protects their clients from the misuse or misappropriation of their clients’ funds and securities. In 2009, the Securities and Exchange Commission (SEC) updated the custody rules to further protect advisory clients. RIAs that have custody are now required to have an annual surprise custody examination. This examination is to be completed by an independent accounting firm that is registered with the Public Company Accounting Oversight Board (PCAOB).

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Revenue from Contracts with Customers (ASC 606)

The underlying principle of the new standard is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The standard consists of a five-step approach. Click here to read "Revenue from Contracts with Customers (ASC 606)."

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Eight Tips to Help you Prepare for your Financial Statement Audit

Through preparation and communication, you can make your yearly audit be a painless process that does what it’s intended to do: help ensure your financial statements are accurate and your financial reporting systems are sound.

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New Lease Accounting Rules will Require Substantially All Leases to be Capitalized on the Balance Sheet

The Financial Accounting Standards Board has proposed new lease accounting standards that are expected to be finalized and issued in early 2016. The new rules, which will require companies to record substantially all leases on their balance sheets, including existing leases, will transform lease accounting and will have a significant impact on company’s financial statements, supporting systems and controls and other items such as debt agreements.

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Goodwill Impairment, What am I Required to Do?

 Goodwill, that fuzzy unknown intangible asset that is tested for impairment at least annually or more frequently when a triggering event is present. For privately held companies, FASB Accounting Standards Update 2014-02 Intangibles – Goodwill and Other, simplified the goodwill impairment process by removing the annual impairment test and allowing private companies to amortize goodwill, but the standard did not remove the requirement to test goodwill for impairment when a triggering event is present. So, what exactly is a triggering event and how do you test goodwill for impairment?

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Accounting for Contingent Earn-outs; Are You Recording Yours Properly?

According to Generally Accepted Accounting Principles (GAAP), when a company acquires a business, the consideration paid, assets acquired, and liabilities assumed are recorded at their fair values. The consideration paid not only includes the actual cash paid or debt incurred, but any contingent consideration payments or receipts (earn-outs) that are part of the purchase agreement. Contingent earn-outs are often structured as a multiple of a measureable performance benchmark. For example, if the acquired company makes more than $1,000,000 in sales, we will pay you 1% of the sales above $1,000,000. As the name implies, payments under these agreements are contingent upon the acquired business meeting or exceeding a pre-determined benchmark.

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Financial Due Diligence, an Ounce of Prevention is Worth a Pound of Cure

Your company, How Did I Miss That Corporation (HOW) has been struggling. Sales have been stagnant over the last three years and net income has started to decline. Investors are growing restless and are calling for change. One late night you stumble upon an opportunity to acquire Hook Line and Sinker Corporation (HOOK), a competitor. After reviewing the investment reporting package provided, the deal and price look good. HOOK has suffered losses over the last few years, but these losses are due to one-time occurrences and a lot of related party transactions and you believe you can reduce overhead by sharing administrative resources. You sign the purchase agreement and pay the purchase price, it’s done.

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Strength In Numbers: Why Audited Financial Statements Matter

Sound, trustworthy financial statements are key to any construction company’s success. That’s why every contractor should at least consider investing in audited financial statements.

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Change to Goodwill Accounting

Do you remember when, a little over a decade ago, when you could amortize goodwill and other indefinite-lived intangible assets? In certain cases, companies will again be able to amortize goodwill and other indefinite-lived intangible assets rather than testing these assets for impairment each reporting period.

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Long-Awaited FASB, IASB Guidance Significantly Changes Revenue Recognition in Financial Statements

FASB and the IASB have issued new joint guidance that addresses one of the most important measures investors use when assessing a company’s performance and prospects — revenue.

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