The Financial Accounting Standards Board (FASB) could have congressional lobbyists nipping at its heels over a “book minimum tax” rule in the newly enacted Inflation Reduction Act of 2022 (IRA). This would be the first corporate alternative minimum tax based on financial statement book income since the 1980s. And many in the accounting profession are […]
Category: GAAP
Last Call For Lease Accounting
The updated lease accounting standard is currently in effect for private companies. After several postponements during the pandemic, the Financial Accounting Standards Board (FASB) voted unanimously to move forward with the changes. That means private companies and private not-for-profit entities that follow U.S. Generally Accepted Accounting Principles (GAAP) must adopt the new standard for fiscal […]
Management Letters: Follow Up On Your Auditor’s Recommendations
Maintaining the status quo in today’s volatile marketplace can be risky. To succeed, businesses need to “level up” by being proactive and adaptable. But some managers may be unsure where to start or they’re simply out of new ideas. Fortunately, when audited financial statements are delivered, they’re accompanied by a management letter that suggests ways […]
Deciding Between Cash And Accrual Accounting Methods
Small businesses may start off using the cash-basis method of accounting. But many eventually convert to accrual-basis reporting to conform with U.S. Generally Accepted Accounting Principles (GAAP). Which method is right for you? Cash method Under the cash method, companies recognize revenue as customers pay invoices and expenses when they pay bills. As a result, […]
Timing Counts: Reporting Subsequent Events
Major events or transactions — such as a natural disaster, a cyberattack, a regulatory change or the loss of a large business contract — may happen after the reporting period ends but before financial statements are finalized. The decision of whether to report these so-called “subsequent events” is one of the gray areas in financial […]