Category Accounting Advisory
Benchmarking: Why Normalizing Adjustments are Essential
Benchmarking: Why normalizing adjustments are essential Financial statements aren’t particularly meaningful without a relevant basis of comparison. There are two types of “benchmarks” that a company’s financials can be compared to — its own historical performance and the performance of other comparable businesses.
Before you conduct a benchmarking study, however, it’s important to make normalizing adjustments to avoid any misleading comparisons. This is especially important when looking at periods that include atypical financial results due to the novel coronavirus (COVID-19) pandemic. But there are a variety of factors that require normalizing adjustments.
Read MoreCOVID-19 Pandemic to Trigger Midyear Goodwill Impairment
Airlines, cruise ships, restaurants, entertainment venues, hotels and many other types of businesses are expected to report goodwill impairments for the first quarter of 2020 because of the novel coronavirus (COVID-19). The contagious disease that’s wreaking havoc worldwide is a clear triggering event that would cause many companies to have to test for impairment on an interim basis — before the scheduled annual testing date.
Read MoreDisclosing COVID-19-Related Risks
Efforts to contain the spread of the novel coronavirus (COVID-19) have led to suspension of many economic activities, putting unprecedented strain on businesses. On March 25, the Securities and Exchange Commission (SEC) issued guidance about disclosure obligations related to COVID-19. This article highlights factors for companies to consider when assessing these risks.
Read MoreGoing, Going, Gone: Going Concern Assessments in the Midst of COVID-19
The novel coronavirus (COVID-19) pandemic has adversely affected the global economy. Companies of all sizes in all industries are faced with closures of specific locations or complete shutdowns; employee layoffs, furloughs or restrictions on work; liquidity issues; and disruptions to their supply chains and customers. These negative impacts have brought the “going concern” issue to the forefront.
Read MoreAdjusting Your Financial Statements for COVID-19 Tax Relief Measures
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, contains several tax-related provisions for businesses hit by the novel coronavirus (COVID-19) crisis. Those provisions will also have an impact on financial reporting.
Companies that issue financial statements under U.S. Generally Accepted Accounting Principles (GAAP) are required to follow Accounting Standards Codification (ASC) Topic 740, Income Taxes. This complicated guidance requires companies to report the effects of new tax laws in the period they’re enacted. As a result, companies — especially those that issue quarterly financial statements or that have fiscal year ends in the coming months — are scrambling to interpret the business tax relief measures under the new law.
Read MoreIs Your Accounting Department Being Impacted by COVID-19?
As many businesses are currently struggling with the COVID-19 pandemic, DLA's Accounting Advisory Team is here to help you get through these turbulent times. In a recent PWC CFO Survey, when asked about expectations for the next month, 25% of finance leaders expect to face insufficient staffing, resulting in an inability to get critical work done. DLA knows there are uncertain times, shutdowns, and revenue disruptions making it difficult for many businesses to know how to best survive these difficult times.
Read MoreQuestions to Ask When Making COVID-19 Risk Disclosures
Efforts to contain the spread of the novel coronavirus (COVID-19) have led to suspension of many economic activities, putting unprecedented strain on businesses. The Securities and Exchange Commission (SEC) recently issued guidance to help public companies provide investors and other stakeholders with useful, accurate financial statement disclosures in today’s uncertain marketplace.
Read MoreAuditing Revenue
Efforts to contain the spread of the novel coronavirus (COVID-19) have led to suspension of many economic activities, putting unprecedented strain on businesses. The Securities and Exchange Commission (SEC) recently issued guidance to help public companies provide investors and other stakeholders with useful, accurate financial statement disclosures in today’s uncertain marketplace.
Read MoreHow will the Coronavirus Health Crisis Affect Financial Reporting?
The coronavirus (COVID-19) outbreak — officially a pandemic as of March 11 — has rightly become the focus of massive public attention in recent weeks. In addition to concerns about the health of their workers, businesses may be concerned about how it will affect their financial results and the performance of their supply chain partners.
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