This presentation provides an update on both recently issued and forthcoming pronouncements of the Financial Accounting Standards Board (FASB). Through this presentation, you should be able to identify what changes are effective for your 2015 financial statements, including changes you may choose to early adopt.
Financial Statements are sometimes difficult for business owners to understand. This presentation is to help business owners get a basic understanding of the different statements.
Jimmy Gentry presents "Understanding Financial Statements" during the Reynolds Center for Business Journalism's annual Business Journalism Week, Jan. 2, 2014. Gentry is the Clyde M. Reed Teaching Professor at the University of Kansas' School of Journalism and Mass Communications.
The annual event features two concurrent seminars, Business Journalism Professors and Strictly Financials for journalists.
For more information about business journalism training, please visit http://businessjournalism.org.
This presentation will also provide a year end update of the technical accounting standards (ASU’s), proposed standards that are in Exposure Drafts (ED’s), and the projects of the FASB going forward.
During the presentation attendees can expect to learn the following:
Gain an understanding of the most significant changes in accounting standards over the past 12 months
Become familiar with the proposed changes that the FASB has issued in Exposure Drafts
Acquire knowledge of the big projects that the FASB will address next
After this webinar attendees will be able to answer:
What changes has the FASB made over the past year?
How will these changes impact you and your organization?
What areas will the FASB focus on next?
This presentation discusses the ramifications to your business and the changes required, all as a result of the long awaited Ohio Municipal reform (H.B. 5). This presentation will assist you in analyzing and determining the steps your business must take to be in compliance all in the name of conformity.
Financial Statements are sometimes difficult for business owners to understand. This presentation is to help business owners get a basic understanding of the different statements.
Jimmy Gentry presents "Understanding Financial Statements" during the Reynolds Center for Business Journalism's annual Business Journalism Week, Jan. 2, 2014. Gentry is the Clyde M. Reed Teaching Professor at the University of Kansas' School of Journalism and Mass Communications.
The annual event features two concurrent seminars, Business Journalism Professors and Strictly Financials for journalists.
For more information about business journalism training, please visit http://businessjournalism.org.
This presentation will also provide a year end update of the technical accounting standards (ASU’s), proposed standards that are in Exposure Drafts (ED’s), and the projects of the FASB going forward.
During the presentation attendees can expect to learn the following:
Gain an understanding of the most significant changes in accounting standards over the past 12 months
Become familiar with the proposed changes that the FASB has issued in Exposure Drafts
Acquire knowledge of the big projects that the FASB will address next
After this webinar attendees will be able to answer:
What changes has the FASB made over the past year?
How will these changes impact you and your organization?
What areas will the FASB focus on next?
This presentation discusses the ramifications to your business and the changes required, all as a result of the long awaited Ohio Municipal reform (H.B. 5). This presentation will assist you in analyzing and determining the steps your business must take to be in compliance all in the name of conformity.
Topics Include:
How income tax refund fraud works
How to prevent income tax fraud from happening to you
What governmental income tax agencies are doing to try to stop income tax refund fraud
Other income tax-related frauds to be aware of this time of year
The Affordable Care Act (“ACA”) is currently effective for employers who had 100 or more full time equivalent employees (FTEs) in 2014. Employers who have 50 or more FTEs in 2015 will be subject to the ACA on January 1, 2016
7 Tips to Help Uncover Hidden Blog Content in Your CPA FirmSkoda Minotti
If you’re just starting your blogging journey, or want to supplement your existing blogging strategy, this helpful presentation will surprise you with the many places content can be found.
This popular session returns in 2015 with 12 new great ideas. There are a number of incentives out there for companies and individuals alike that, unless you are looking specifically for them, they may be overlooked.
Ted Ginsburg, CPA, JD from Skoda Minotti's Employee Benefits group provides an update on the Affordable Care Act (ACA) for employers who were not subject to it in 2015, but are facing IRS filing requirements moving forward.
This presentation discusses the massive increases in cyber threats and the best ways to keep your data safe. Through this presentation, you will learn the best practices for implementing and testing a data security program.
State and Local Tax Issues Facing the Real Estate and Construction IndustrySkoda Minotti
Join Mary Jo Dolson, Amy Gibson and Mark Thomas of Skoda Minotti’s State and Local Tax team for an informative discussion on state and local tax issues facing the real estate and construction industry.
Valuation Issues in Developing and Executing Buy-Sell AgreementsSkoda Minotti
A buy-sell agreement is one of the most common tools utilized by attorneys and business advisors in protecting their business owner clients. In this course, you will learn about valuation issues that are critical to buy-sell agreements, such as the use of formulas and valuation discounts, which can significantly impact your client if and when the agreement is triggered.
Common 401(k) Plan Operational DeficienciesSkoda Minotti
This presentation covers some of the most common 401(k) plan deficiencies and errors and how plan sponsors can go about correcting these issues before they escalate.
Accounting Standards Updates (ASU) Effective in 2016 or later yearsIrene Valverde
An overview of new FASB standards effective in 2016 for calendar year-end public and nonpublic companies. Created by Pradeep Budhiraja, Audit and Accounting Principal at Gumbiner Savett in Santa Monica, CA. This presentation was delivered to the Los Angeles Westside Chapter CalCPA meeting on July 19, 2016.
Bentleys is proud to present our annual Financial Reporting Update for all financial statement preparers, designed specifically to address the current hot issues & new developments facing our profession.
The update will provide you with practical solutions, tools and skills that will help you identify issues with the preparation of your financial statements.
You will be updated on the key changes to the financial reporting requirements in Australia, ASIC hot topic areas, and enjoy the opportunity to network with your peers and colleagues.
This update is for people in financial reporting, governance or similar roles. It will provide insight into the changing financial reporting landscape and the implications it will have on your financial statements and banking covenant requirements.
If you are a Finance Director, Chief Financial Officer or a Financial Controller this slide pack will benefit you.
Partner Janice Snyder discussed the recent changes made by the Financial Accounting Standards Board and how those changes will impact you and your organization.
SEC Adopts Enhanced Compensation and Corporate Governance Proxy Disclosure Rules for 2010 Proxy Season
A Practical Approach to What Companies, Boards and Compensation Committees Need to Do Now
This presentation will address various challenges in the application of tax provisions under ASC 740, Accounting for Income Taxes. The discussion will focus on complexities related to the calculation and reporting of valuation allowances, deferred taxes, interim taxes, intraperiod tax allocation, uncertain tax positions, and financial statement presentation.
For more information visit www.heincpa.com.
Smart Manufacturing Workshop: An Interactive Improv SessionSkoda Minotti
Learn how you can increase revenue, decrease costs and improve profitability all while improving your overall equipment effectiveness, quality, on-time delivery and much more!
Your business faces risks on multiple fronts, so risk management should be a strategic priority. Identifying and addressing risks helps your business run smoothly, and keeps you focused on pursuing your business objectives. We discuss strategies to mitigate your IT threats, explore insurance options and assess your internal control needs.
Navigating the Tax and Accounting Implications of CryptocurrenciesSkoda Minotti
Cryptocurrency is used all over the world, for all kinds of exchanges and transactions. It offers a host of benefits including:
- Secure transactions
- Privacy protection and business recognition
- Decentralization
- A faster, cheaper and frictionless alternative
According to some expert opinions, cryptocurrencies will eventually dominate as currencies of choice. As more and more business owners are taking steps to incorporate virtual currency into their business, they must be aware of and understand key tax and accounting issues that relate to cryptocurrency.
By providing regular feedback to your employees, you drive accountability and productivity within your business. This also is one of the largest predictors of employee engagement. A company without regular feedback loses the ability to make direct connections between employees and management. In addition, employees who achieve their goals and who are appropriately rewarded will continue to drive high performance. This session outlines the essentials of performance management and structuring rewards to best engage and motivate employees.
Non-Qualified Deferred Compensation Programs for Private CompaniesSkoda Minotti
Paying annual bonuses may not keep the executives around after the bonus is paid. Should executives be rewarded if the employer is not doing well? How can employers attract and retain key executives while creating a system that will reward them if the company is profitable?
This interactive session is designed for both novice and seasoned interviewers alike. During the course, you will explore the concepts of motivational fit and behavioral-based interviewing. We will also uncover common mistakes made by most interviewers and what questions are legal to ask a candidate.
Valuation Issues in Developing and Executing Buy-Sell AgreementsSkoda Minotti
A buy-sell agreement is one of the most common tools utilized by lawyers and business advisors in protecting their business owner clients. In this presentation, you will learn about valuation issues that are critical to buy-sell agreements, such as the use of formulas and valuation discounts, which can significantly impact the parties to the agreement if and when it is triggered.
ABC Presents: Recruiting and Retaining Top TalentSkoda Minotti
Businesses today are experiencing a workforce shortage that is crippling production and growth. Even more, our workforce has become increasingly disengaged as companies expand and diversify. Never before has it been so challenging to recruit, hire, develop and retain a skilled construction workforce. Estimates are that there will be a shortage of 1.4 million construction workers in the next 10 years. How can you build your company and its workforce? Heidi Hoyt, Skoda Minotti’s managing director of Staffing, shares views about staffing challenges and opportunities for organizations of every size and scope.
State and Local Tax Nexus Issues and the Impact on Mergers and AcquisitionsSkoda Minotti
Would you sell a home before making it attractive enough to turn a profit? Selling a business is no different. Before you plan to sell, there are essential tax implications you should understand and steps you should take to ensure smooth sailing for a successful transaction
Future-Proofing Your Business with TechnologySkoda Minotti
Technology is rapidly moving from a business enabler to the core of the business. New technologies such as “big data” and analytics, the internet of things (IoT), robotics, mobile technology, artificial intelligence and cybersecurity are transforming the way business gets done.
We explore the business implications of technology and their impact on businesses of all sizes and scopes, and presents strategies for charting a path through these disruptive times.
Manufacturing in Northeast Ohio: Where We Stand, Where We’re HeadedSkoda Minotti
What are the concerns and challenges of manufacturing companies in Northeast Ohio? How do they perceive opportunities and issues confronting them in 2019? Where are they allocating time, money and resources, and what is their rationale?
Today’s job seekers think and act differently. Attracting and retaining top talent takes a mix of new-school technology and old-school sensibility. The good news: Developing a sound strategy is well within your reach.
Stacy Bauer, Co-Founder of BauerGriffith, LLC, Heidi Hoyt, Skoda Minotti's Managing Director of Staffing, and Laura Rohde, Skoda Minotti's Managing Director of HR Services, share their views about staffing challenges and opportunities for organizations of every size and scope.
New Ohio Cybersecurity Law RequirementsSkoda Minotti
Skoda Minotti’s Risk Advisory Services Group and Insurance Services Group are working closely with insurance industry licensees to meet the considerable requirements under the Ohio cybersecurity law. This presentation provides more detailed information about the law, and assists you with your understanding and implementation of the requirements.
Five Digital Marketing Trends Your Company Needs to Know in 2019Skoda Minotti
With the digital marketing landscape continually evolving, it’s difficult to know which trends will make the most meaningful impact on your business. Bob Goricki, Skoda Minotti’s Director of Digital Marketing, discusses five key trends that are shaping marketing technology, social media advertising, marketing automation, General Data Protection Regulation (GDPR) and search engine optimization in 2019.
This course will take you through the process of a typical business valuation engagement, from scoping the work to ultimately arriving at a conclusion of value. Through a case study, we will address fundamental issues including valuation approaches (asset, income and market), normalizing analysis and valuation discounts.
The Importance of State and Local Tax NexusSkoda Minotti
This course will lay out some of the important aspects of state income tax and sales tax nexus concerns, then address the importance of performing detailed state and local tax due diligence. It will also discuss the importance of performing due diligence to address the potential sins of the past before actually entering the M&A market.
The 10 Most Influential Leaders Guiding Corporate Evolution, 2024.pdfthesiliconleaders
In the recent edition, The 10 Most Influential Leaders Guiding Corporate Evolution, 2024, The Silicon Leaders magazine gladly features Dejan Štancer, President of the Global Chamber of Business Leaders (GCBL), along with other leaders.
B2B payments are rapidly changing. Find out the 5 key questions you need to be asking yourself to be sure you are mastering B2B payments today. Learn more at www.BlueSnap.com.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
At Techbox Square, in Singapore, we're not just creative web designers and developers, we're the driving force behind your brand identity. Contact us today.
In the Adani-Hindenburg case, what is SEBI investigating.pptxAdani case
Adani SEBI investigation revealed that the latter had sought information from five foreign jurisdictions concerning the holdings of the firm’s foreign portfolio investors (FPIs) in relation to the alleged violations of the MPS Regulations. Nevertheless, the economic interest of the twelve FPIs based in tax haven jurisdictions still needs to be determined. The Adani Group firms classed these FPIs as public shareholders. According to Hindenburg, FPIs were used to get around regulatory standards.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
4. - 4 -
• When is this applicable to me?
– You have sold or discontinued a component of your company
• What has changed?
– Higher threshold for discontinued operations treatment
– More requirements for actual discontinued operations
– More disclosures for disposals that are not discontinued
operations
DISCONTINUED
OPERATIONS
5. - 5 -
• Intended to reduce number of transactions qualifying as
discontinued operations
• New rule: disposals of a component or group of
components that represents a strategic shift that has or
will have a major impact on an entity’s operations or
financial results
• New disclosure requirements
DISCONTINUED
OPERATIONS
6. - 6 -
• Requires reclassification of balance sheet assets and
liabilities for all periods
• Required cash flow disclosures (operating and investing)
DISCONTINUED
OPERATIONS
8. - 8 -
• When is this applicable to me?
– Your company has previously presented its financial statements
as a “Development Stage Entity”
• What has changed?
– This classification is no longer recognized in GAAP
– The old “from inception” financial statements not applicable
DEVELOPMENT
STAGE ENTITIES
10. - 10 -
• When is this applicable to me?
– You are presenting standalone financial statements of an entity
that has been previously acquired by a parent entity
• What has changed?
– You can elect to apply or not apply pushdown accounting (i.e.
basis step-up) at any change in control
– You can elect to apply pushdown accounting to most recent
previous change in control if preferable
PUSHDOWN ACCOUNTING
11. - 11 -
• What is pushdown accounting?
– Changing the accounting basis within an acquired subsidiary to
reflect the acquirer’s basis in that subsidiary
– “Push down” the goodwill, step-up in fair values, etc.
• Previous guidance is not prescriptive and SEC specific
– Allowable when 80-95% of a business is acquired
– Not allowed at less than 80%
– Required at more than 95%
PUSHDOWN ACCOUNTING
12. - 12 -
• New guidance
– Allowable on any change in control
– Companies can take the option at each change in control
• Bargain purchase gain not allowed
PUSHDOWN ACCOUNTING
• Parent company debt cannot be
pushed down
13. - 13 -
• May retroactively elect pushdown accounting from most
recent change in control upon adoption of the standard
• Undoing previous pushdown accounting is not permitted
• No disclosures required for change in control event when
pushdown accounting is not applied
PUSHDOWN ACCOUNTING
15. - 15 -
• When is this applicable to me?
– Your company is privately held
– Your balance sheet has goodwill
• What has changed?
– Upon adoption, amortize goodwill over a ten year period rather
than testing annually for impairment
GOODWILL
16. - 16 -
• Effective for periods beginning on
or after December 15, 2014 (early
adoption permitted)
• Existing goodwill can be amortized
prospectively (no restatement or
“catch-up”)
GOODWILL
17. - 17 -
• Current Standard:
Require at least annual impairment
testing
Compare the implied fair value with the
carrying value
Perform a hypothetical application of
the acquisition method
Record any impairment as a current
charge to earnings
GOODWILL
18. - 18 -
• Updated Standard:
Amortize goodwill
Test for impairment with triggering event
No hypothetical application of the acquisition
method; impairment is excess of carrying
amount over fair value
Impairment still a charge against current
earnings
GOODWILL
19. - 19 -
• Test for impairment
• Triggering events:
Significant change in general economic conditions
Deterioration in the business’ environment
Significant increases in costs that would impact the
company negatively
Downturn in overall performance
GOODWILL
20. - 20 -
• Example One:
Alvin Co. acquires the assets of Simon, Inc. for $2MM. The fair
value of Simon’s net assets is $1.8MM, resulting in residual
goodwill of $200,000
Alvin can amortize the $200k of goodwill over 10 years,
resulting in annual amortization expense of $20,000
GOODWILL
21. - 21 -
• Example One (continued):
In Year 2, Simon’s primary supplier of materials ceases
operations, and the only option is to purchase from a supplier that
charges 50% more for materials (this is significant)
Triggering event, requiring impairment test, which indicates that
the carrying amount exceeds fair value by $50,000
Current year impairment charge of $50k
GOODWILL
22. - 22 -
• Example One (continued):
Remaining net goodwill of $130k (original $200k, less year
one amortization of $20k, less impairment of $50k) is
amortized over the remaining nine years
GOODWILL
23. - 23 -
• Example Two:
Theodore, LLC has $1,000,000 of goodwill
on its balance sheet from an acquisition
effected in a prior year
Theodore, LLC elects to adopt the new
standard
Goodwill is amortized from the beginning
of the year of adoption, and $100,000 of
amortization is recorded in current year
GOODWILL
24. - 24 -
PCC Standard - Derivatives and
Hedging
ASU 2014-03
25. - 25 -
• When is this applicable to me?
– Your company is privately held
– Your company has variable-rate debt and a swap to “fix” the
interest rate
• What has changed?
– Upon adoption, fewer stipulations to qualify for hedge accounting
DERIVATIVES
26. - 26 -
• New alternative for accounting for receive-variable, pay-
fixed interest rate swap agreements
– The “shortcut to the shortcut”
• Previous requirements to strip out fluctuations in fair value
from earnings were complex and arbitrary
• Available for all entities, except public companies, not-for-
profit entities, benefit plans, and financial institutions
DERIVATIVES
27. - 27 -
• Criteria to apply new shortcut
– Both debt and swap are indexed on same rate (i.e. LIBOR)
– “Plain vanilla” swap
– Dates on swap and debt match or are at least close
– Fair value of swap at inception is at or near zero
– Notional amount of swap matches amount of debt hedged
– Interest payments are designated as hedged
• Documentation required by date on which financial statements are
available to be issued
– Previous standard required documentation at inception of hedge (i.e. “day one”)
DERIVATIVES
29. - 29 -
• When is this applicable to me?
– Your company is privately held
– You rent a building from a related party and have previously
consolidated that related party entity in your financial statements
• What has changed?
– Upon election, no longer required to consolidate related party
lessor
LEASING
30. - 30 -
• Third Party Users (e.g. banks)
will ask for consolidating
schedules to break out entities
• Focus is on user-relevance and
cost-benefit
LEASING
31. - 31 -
• Variable Interest Entities / Common Control Leasing
• Alternative to the old “FIN 46(R)”
• Applies to all entities, other than public companies,
not-for-profit, and employee benefit plans
LEASING
32. - 32 -
• Private companies set up separate entities to own real
property for estate planning, tax planning, or legal
liability purposes
• Consolidation for common control can distort the financial
statements of the lessee
LEASING
33. - 33 -
• Main Provisions:
Lessee and Lessor are under common control
Lessee has a lease arrangement with Lessor
Substantially all of the activities between the
entities relate to leasing
Lessee explicitly guarantees or provides
collateral for any obligations of the lessor
related to the leased property
LEASING
34. - 34 -
• Accounting policy election – applies to
current and future
• Normal VIE disclosures not required
• Normal related party disclosures
still apply
LEASING
38. - 38 -
• When is this applicable to me?
– You have capitalized debt issuance costs as an asset on the
company’s balance sheet
• What has changed?
– These costs are now presented as a deduction from the related
debt liability
DEBT ISSUANCE COSTS
39. - 39 -
• Consistent with presentation of debt discounts
• Amortization is interest expense
• Costs related to revolving debt agreements are generally
assets
• Costs that are incurred before funding is received are
assets, which are then reclassified
• Early adoption allowed
DEBT ISSUANCE COSTS
41. - 41 -
• When is this applicable to me?
– You have had accounting gains/losses that have been considered
“infrequent and unusual”
• What has changed?
– No longer required to present separately on income statement if a
transaction meets the above criteria
EXTRAORDINARY ITEMS
43. - 43 -
• When is this applicable to me?
– There is uncertainty as to whether your company can continue as
a going concern
• What has changed?
– Management required to perform assessment
– Outlook period is one year from report issuance date, not balance
sheet date
– Added required disclosures
GOING CONCERN
44. - 44 -
• Substantial doubt
– “Conditions and events, considered in the aggregate, indicate that
it is probable that the entity will be unable to meet its obligations
as they become due within one year after the date that the
financial statements are issued”
– The term probable is used consistently with its use in ASC 450 on
contingencies
GOING CONCERN
45. - 45 -
• Factors that could create substantial doubt
– Negative financial trends
– Default on debt/loans or need to restructure such agreements
– Work stoppages, uneconomic long-term commitments
– Adverse legal judgments, loss of key customer
GOING CONCERN
46. - 46 -
• Standard setters have indicated they expect fewer going
concern disclosures under the new model
• Look forward period one year from financial statement
issue date
– Will you have debt covenant issues in the new assessment
period?
GOING CONCERN
47. - 47 -
• Disclosures
– Principle events and conditions
– Management’s evaluation
– Management’s plans
– If management’s plans do not alleviate substantial doubt, a
statement is issued stating that there is “substantial doubt about
the entity’s ability to continue as a going concern”
GOING CONCERN
48. - 48 -
Intangible Assets Recognized in
a Business Combination
ASU 2014-18
49. - 49 -
• When is this applicable to me?
– Your company is privately held
– You have recently completed a business combination
• What has changed?
– Upon adoption, no longer required to separately value acquired
customer lists and non-compete agreements
– Such intangibles are included in goodwill
INTANGIBLE ASSETS
50. - 50 -
• Available for all entities, except public companies and not-
for-profit entities
• Reduces number of intangible assets to recognize in a
business combination
• Only recognizes those arising from contractual and/or
legal rights
• Qualitatively discloses intangibles acquired but not
recognized (included in goodwill)
• Effective prospectively on acquisitions made after final
issuance of standard
INTANGIBLE ASSETS
51. - 51 -
• What would be recognized under the new standard?
– Registered trademarks, trade names
– Registered internet domain names
– Patented technology
– Licensed computer software
– Trade secrets and processes that are legally registered
– Artistic-related intangible assets
INTANGIBLE ASSETS
52. - 52 -
• What would be recognized under the new standard?
– Order backlog
– Customer contracts
– Licensing, royalty, and franchise agreements
– Advertising, construction, supply contracts
– Lease agreements
– Unregistered trade secrets and processes
INTANGIBLE ASSETS
53. - 53 -
• What would not be recognized under the new standard?
– Customer lists
– Customer relationships
– Research and development
– Unpatented technology
– Databases
All of the above can be identifiable intangible assets to the extent
that the agreements are noncancelable.
INTANGIBLE ASSETS
55. - 55 -
• When is this applicable to me?
– Whenever you have recorded revenue
• What has changed?
– Entirely new model for recognizing revenue
– Dispenses with prior industry-specific guidance
REVENUE RECOGNITION
56. - 56 -
• Effective for private companies for annual periods
beginning after December 15, 2018
• This means the 12/31/19 annual financial statements for a
calendar year end company will be the first to comply with
the new standard
• Initial adoption can be full retrospective or modified
– Full – adjust prior period column
– Modified – adjust retained earnings at 1/1/19
REVENUE RECOGNITION
57. - 57 -
• Five step model
1. Identify the contract with the customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate transaction price to performance obligations
5. Recognize revenue when (or as) the entity satisfies a
performance obligation
REVENUE RECOGNITION
58. - 58 -
• Performance obligations
– Goods or services
– Identify those that are distinct within the context of the contract
– Interdependent or interrelated goods and services can be
aggregated into one performance obligation
REVENUE RECOGNITION
59. - 59 -
• Transaction price
– Includes an estimate of variable consideration
– May adjust for time value of money
• Allocating the transaction price
– Needed when multiple performance obligations are in one
contract
– Based on relative stand-alone selling price
– Can be estimated
– Maximize use of observable inputs
REVENUE RECOGNITION
60. - 60 -
• Recognize revenue
– Point in time or over time
– When recognized over time, use a systematic measurement of
progress
– “Control” model
REVENUE RECOGNITION
61. - 61 -
• Other provisions
– Capitalize incremental contract costs
– Contract modifications
– Warranties
– Licenses – right to use vs. right to access
REVENUE RECOGNITION
62. - 62 -
Ryan Siebel
Principal – Skoda Minotti
(440) 449-6800
rsiebel@skodaminotti.com
CONTACT ME
Editor's Notes
Under current GAAP (without adopting this), you have to test goodwill for impairment on at least an annual basis.
This can sometimes be complex and costly.
We have done this for current clients already. It’s a change in accounting method – no prior period adjustment necessary.
Performing a hypothetical application of the acquisition method – what does that mean?
You still have to test for impairment if there is a triggering event.
Now, let’s say there is a triggering event.
So again, there is NO restatement of prior years, and goodwill is amortized from day one of the year of adoption.
The other relevant ASU issued in 2014 thus far is for consolidations. The infamous “FIN 46”!
Often, banks will ask for supplementary schedules (consolidating schedules) so they can break out the VIE from the operating company.
What is relevant to the users of the financial statements?
For example, the owners of an operating company will set up a separate legal entity that owns the real estate. Then, the operating company will lease the real property from that second entity.
Normally under GAAP, this would require consolidation of both companies. However, this Update may allow the de-consolidation of the real estate entity.
So, in comparative statements you would NOT restate the prior year. Just present the current year, under the new updated standard and disclose the accounting policy election.
Under current GAAP (without adopting this), you have to test goodwill for impairment on at least an annual basis.
This can sometimes be complex and costly.
Under current GAAP (without adopting this), you have to test goodwill for impairment on at least an annual basis.
This can sometimes be complex and costly.