MLR

Category: Audit Related Topics

Accounting for Business

Welcome to our Resources section, where you will find articles pertaining to accounting for business, business financial planning, financial advice, and the industries of our clients. This section is a great source of information, but please contact us if you feel you need professional financial advice. Maxwell Locke & Ritter is here to offer trusted guidance.

 

The new revenue recognition rules apply to all companies that follow United States’ Generally Accepted Accounting Principles (GAAP). The accounting personnel who deal with accounting systems within your private company should ensure they are prepared for this change in financial reporting. No matter what industry your business deals with, you should schedule and follow the new changes in order to remain current in your policies.

In the context of mergers and acquisitions, potential investors get a level of assurance when the investment target is audited.  However, relying solely on the target’s audited financial statements when making an investment decision could be shortsighted.

Audits have become more important due to increased public and government scrutiny of not-for-profit organizations, their management and their boards.

If you are selling a business, the buyer may want to pay part of the price through an earnout provision. This is a contractual arrangement in which the seller receives additional payment in the future if certain financial goals are met.

Many companies provide their financial statements, along with a CPA’s report, to lenders, investors, suppliers and customers. Informed readers of the report will gain varied levels of comfort based on the type of financial statement provided.

Think of your not-for-profit organization and its external auditor as dance partners performing a well-choreographed routine.

Three new accounting changes will impact financial statements issued by accounting firms in the upcoming years. While we continually discuss these changes with our clients, we also want their lending institutions and investors to understand the effect these changes may have on their clients’ debt covenants, revenues, earnings and other information used to make funding decisions.

For-profit subsidiaries of not-for-profit organizations are strikingly diverse. Consider these real-life examples: In one part of the country, a not-for-profit health maintenance organization (HMO) creates a for-profit subsidiary to offer health insurance unavailable through HMOs.