Understanding Accounting Standards
Have you ever heard your Mid Missouri accountant say something along the lines of, we have to change your accounting procedures due to the release of SSARS 21 or FASB ASU No. 2014-09? Have you ever wondered what they mean when they say SSARS, FASB or GAAP? Or how accounting changes will impact you as an accounting client?
First, let’s understand what these acronyms stand for. SSARS stands for Statements on Standards for Accounting and Review Services, FASB stands for Financial Accounting Standards Board and GAAP stands for Generally Accepted Accounting Principles, makes perfect sense right? If you aren’t an accountant SSARS/FASB/GAAP isn’t something that you hear about every day in the news like you do with changing tax laws. However, these standards are very important for how your accounting results are displayed/portrayed and what your bottom line will look like. These standards not only dictate how an accountant at a CPA firm in Central MO operates when it comes to your accounting, but also the work of your internal accountant/controller/CFO.
Now, let’s look at an example of how a recent accounting standard has changed accounting practices:
• SSARS 21:
o This standard was designed to give accountants who work with clients using electronic or cloud-based programs or where firms work with clients remotely the ability to prepare financial statements without the burden and restrictions that compilations require. This engagement provides a more cost efficient option for clients who want to see their financial results in the form of financial statements.
Accounting standard changes can be something as simple as presentation (as noted above) or it can be as complex as the recent changes to revenue recognition (ASU NO. 2014-09) and lease accounting (ASU No. 2016-02). Let’s consider how you are recording your revenue in your accounting system, can you answer these questions:
1. Do you have a contract?
2. Is it likely that you will be able to collect what you have invoiced your customer?
3. Are you providing multiple performance obligations in your contract?
4. When does a customer have control of the goods you have agreed upon?
5. Do you recognize revenue at a point in time or over time?
If after considering the items above, it leaves you with more questions than answers, let’s schedule some time to discuss these items because the answers will have big impacts on your accounting.
Here at Wilson Toellner, we have experts in accounting standards that can help implement changes into your business or explain how we can become your external accounting team. By becoming your back office or accountant our goal is to leave you more time to focus on what’s most important, your business. We can provide services as simple as bill pay all the way to functioning CFO services in Mid-MO.
If you are interested in learning more about changing accounting standards or how we can be of help in your accounting, please call (660) 827-4990.
Written By: Ashley Watson, CPA
First, let’s understand what these acronyms stand for. SSARS stands for Statements on Standards for Accounting and Review Services, FASB stands for Financial Accounting Standards Board and GAAP stands for Generally Accepted Accounting Principles, makes perfect sense right? If you aren’t an accountant SSARS/FASB/GAAP isn’t something that you hear about every day in the news like you do with changing tax laws. However, these standards are very important for how your accounting results are displayed/portrayed and what your bottom line will look like. These standards not only dictate how an accountant at a CPA firm in Central MO operates when it comes to your accounting, but also the work of your internal accountant/controller/CFO.
Now, let’s look at an example of how a recent accounting standard has changed accounting practices:
• SSARS 21:
o This standard was designed to give accountants who work with clients using electronic or cloud-based programs or where firms work with clients remotely the ability to prepare financial statements without the burden and restrictions that compilations require. This engagement provides a more cost efficient option for clients who want to see their financial results in the form of financial statements.
Accounting standard changes can be something as simple as presentation (as noted above) or it can be as complex as the recent changes to revenue recognition (ASU NO. 2014-09) and lease accounting (ASU No. 2016-02). Let’s consider how you are recording your revenue in your accounting system, can you answer these questions:
1. Do you have a contract?
2. Is it likely that you will be able to collect what you have invoiced your customer?
3. Are you providing multiple performance obligations in your contract?
4. When does a customer have control of the goods you have agreed upon?
5. Do you recognize revenue at a point in time or over time?
If after considering the items above, it leaves you with more questions than answers, let’s schedule some time to discuss these items because the answers will have big impacts on your accounting.
Here at Wilson Toellner, we have experts in accounting standards that can help implement changes into your business or explain how we can become your external accounting team. By becoming your back office or accountant our goal is to leave you more time to focus on what’s most important, your business. We can provide services as simple as bill pay all the way to functioning CFO services in Mid-MO.
If you are interested in learning more about changing accounting standards or how we can be of help in your accounting, please call (660) 827-4990.
Written By: Ashley Watson, CPA
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