Adding a new partner in a partnership has several financial and legal implications. Let’s say you and your partners are planning to admit a new partner. The new partner will acquire a one-third interest in the partnership by making a cash contribution to it. Let’s further assume that your bases in your partnership interests are […]
Category: Internal Control
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 […]
CFO, yes or no? Here’s how to decide
Whether your not-for-profit organization needs a chief financial officer (CFO) depends on many factors, such as the size of your organization, the complexity and types of revenue sources, and the number of programs you have. Static organizations are less likely to need a CFO than those with evolving programs and long-term plans that rely on […]
Goodwill in a bad economy
In today’s volatile economy, many businesses and nonprofits have been required to write down the value of acquired goodwill on their balance sheets. Others are expected to follow suit — or report additional write-offs — in 2022. To the extent that goodwill is written off, it can’t be recovered in the future, even if the […]
Tax Issues To Assess When Converting From a C Corporation To An S Corporation
Operating as an S corporation may help reduce federal employment taxes for small businesses in the right circumstances. Although S corporations may provide tax advantages over C corporations, there are some potentially costly tax issues that you should assess before making a decision to switch. Here’s a quick rundown of the most important issues to […]
FAQS About Fair Value In Accounting
In recent years, accounting rule makers have issued guidance that requires certain items on the balance sheet to be reported at “fair value.” Here are some answers to frequently asked questions about this standard of value and how it’s measured. What is fair value? Under U.S. Generally Accepted Accounting Principles (GAAP), fair value is “the […]
Time To Spring Clean Your Programming Lineup
Does your not-for-profit offer programs that may have started out promising, but have become disappointing? Do you have replacement programs in mind but haven’t yet secured funding for them? Consider subjecting your programming lineup to a good spring cleaning. That way, you can reallocate funds to offerings that have the best potential to meet your […]
AI For Small To Midsize Businesses Isn’t Going Away
Artificial intelligence (AI) has made great inroads into certain sectors of the U.S. economy. However, it hasn’t reached many small to midsize businesses (SMBs) in a major way … yet. In 2021, AI analysis firm Unsupervised published a survey of 520 SMB owners that found 48% of them still found AI too cost prohibitive. Forty […]
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 […]