Technical Accounting Services for High-Growth, Tech Startups

Any time your business acquires a company, or is acquired, US GAAP requires specific accounting as of the acquisition date. This requires technical review of acquisition documents, what constitutes the purchase price, and a complex revaluation/allocation of the acquisition-date balance sheet that usually requires the support of a valuation specialist.

Our team can navigate the complex acquisition accounting guidance of ASC 805, determine what is included or excluded from the transaction, assist in preparing the opening balance sheet, and partner with your valuation firm. We will determine the right entries to start the accounting of your acquired business on the right path, and with supporting detail that will meet the needs of any audit/review.

Beginning in 2022, all companies under US GAAP are required to adopt the new leasing standard of ASC 842. This new standard is a major change, and requires ALL leases to be recorded on your balance sheet, including operating leases that were previously excluded. The process of identifying and calculating the necessary balances for each lease in accordance with US GAAP can be taxing.

Our team will help you through every step of implementing the new leasing standard. Our services include technical review and calculation of all identified leases, developing a comprehensive accounting policy and related disclosures, and a search for any previously unidentified leases. All of these procedures are documented and supported through a package of deliverables generally expected by auditors.

Want to know how much it’ll cost to implement ASC 842? Check out our calculator here.

Within the past few years, all companies under US GAAP are now required to recognize revenue for all contracts with customers under the new comprehensive framework of ASC 606. This is a 5-Step Model for every contract that requires identification of performance obligations in a contract, measuring the amount of contract consideration, allocation over all performance obligations, and determining the correct method of revenue recognition.

Our experience from a wide range of industries and business models can help you easily navigate this complex accounting framework. Our team will work with you to understand your company’s revenue streams and contracts, perform technical review of a sample of contracts, evaluate for revenue recognition, calculate any necessary adjustments to your existing process, and document in an accounting policy often requested by auditors.

Most early-stage companies need to be very creative with their funding strategies. A capitalization table often includes a mix of common stock, preferred stock, warrants, convertible or nonconvertible debt, and many other types of instruments. Under US GAAP, the accounting treatment for each of these can vary significantly based on certain features within an instrument, with highly complex underlying guidance.

Our team’s expertise includes a wide range of both equity and debt financing instruments, often with highly complex or unique terms. By reviewing your organizational documents and financing agreements, we can determine the correct accounting for each instrument, and document our evaluation in technical memos that are expected by auditors.

Share-based instruments are a common form of compensation for many companies; it provides employees and advisors with strong incentives to grow the business. Common stock comp includes stock options, restricted stock, SAR’s, profit interests, and phantom equity. However, these instruments can be complex to account for under US GAAP, with major changes in accounting treatment based on certain terms and features.

Our team’s background with companies with a wide range of share-based compensation plans can help you reach the right answers on how to account for your stock comp awards. We can work with any existing systems you utilize, or manually calculate as needed, the related amounts required to be recognized as stock compensation expense, and document our technical evaluation in an accounting policy often requested by auditors.