Tag: business

Accounting for Revenue Recognition: New Standards and Practices

03/08/2024 /

Revenue recognition is a crucial aspect of accounting that determines when and how revenue is recognized in financial statements. With evolving business practices and regulatory requirements, understanding the latest standards and practices in revenue recognition is more important than ever. Most importantly, knowing how to migrate from ns to qb while adhering to these standards ensures that your revenue recognition processes remain accurate and compliant. In this article, we’ll walk you through the key changes and best practices for accounting for revenue recognition in a friendly and informative tone.

What Is Revenue Recognition?

Revenue recognition is the process of recording revenue in the financial statements when it is earned, regardless of when the cash is actually received. This principle ensures that revenue is reported in the period in which it is earned and matches the expenses incurred to generate that revenue.

The New Standards: IFRS 15 and ASC 606

In recent years, significant changes have been made to revenue recognition standards globally. The International Financial Reporting Standards (IFRS) 15 and the Accounting Standards Codification (ASC) 606 in the U.S. have introduced a more consistent and comprehensive approach to revenue recognition.

IFRS 15

IFRS 15 establishes a framework for recognizing revenue from contracts with customers. Its goal is to enhance comparability across industries and countries by introducing a unified, principles-based model for revenue recognition.

ASC 606

Developed by the Financial Accounting Standards Board (FASB), ASC 606 aligns closely with IFRS 15. It establishes a comprehensive framework for recognizing revenue and improves consistency across U.S. Generally Accepted Accounting Principles (GAAP) and international standards.

Key Principles of the New Standards

Both IFRS 15 and ASC 606 are built around a core set of principles designed to improve revenue recognition practices. Here are the key principles:

Identify the Contract with the Customer

Revenue should be recognized according to the terms outlined in a contract with a customer. A contract is an agreement that establishes enforceable rights and obligations and can be in written, oral, or implied form based on customary business practices.

Identify the Performance Obligations

Performance obligations are promises in a contract to transfer goods or services to a customer. Each distinct good or service should be treated as a separate performance obligation if it is capable of being distinct and distinct within the context of the contract.

Determine the Transaction Price

The transaction price is the amount of consideration a company expects to be entitled to in exchange for transferring goods or services. It should include variable considerations, such as discounts or incentives, that are likely to be received.

Acknowledge Revenue When Each Performance Obligation is Satisfied

Revenue is recognized when a performance obligation is fulfilled by transferring control of a good or service to the customer. This transfer of control can happen either over time or at a specific point, depending on the nature of the transfer.

Best Practices for Implementing the New Standards

Implementing the new revenue recognition standards requires careful planning and execution. Here are some best practices to help you navigate the transition:

Review and Assess Contracts

Thoroughly review your contracts with customers to identify performance obligations and determine how they align with the new standards. Ensure that all relevant terms and conditions are considered in the revenue recognition process.

Update Accounting Policies and Procedures

Update your accounting policies and procedures to reflect the new standards. This may involve revising revenue recognition policies, adjusting internal controls, and implementing new reporting processes.

Train Your Team

Ensure that your accounting and finance teams are well-versed in the new standards. Provide training and resources to help them understand the changes and apply the new principles effectively.

Use Technology and Automation

Leverage technology and automation tools to streamline the revenue recognition process. Accounting software that supports the new standards can help ensure accurate and timely reporting.

Monitor and Review

Continuously monitor and review your revenue recognition practices to ensure compliance with the new standards. Regularly assess the effectiveness of your processes and make adjustments as needed.

Accounting for revenue recognition is evolving, with new standards like IFRS 15 and ASC 606 reshaping how revenue is recorded and reported. By understanding and implementing these new principles, you can ensure that your financial statements accurately reflect your revenue and provide valuable insights for decision-making.

business

Tips to Consider When Seeking Business Startup Funds

01/12/2021 / / 0 Comments

Are you looking for startup funding for your business? Have you already started and perhaps found the process overwhelming? If you are in this boat, this is the article for you. Below, we have listed all the tips to consider when looking for startup funds for your business. There are a few things you have to keep in mind to see your business grow. For instance, how will you use your resources efficiently if/when you get them? Here is more on this:

Work Out a Business Plan

fundsWhenever you approach an investor, they will always ask you what your business plan is. It is always good to think this through beforehand. You can first start with a vision board where you can pin right about anything! From there, narrow it all down to one document.

Where do you see your company in 5 years? What about a year? What do you need to do now to get there? Do a step-by-step guide so that you land on investors who can see your vision. Also, do not look past your friends and family for startup funds. You might have a loved one who is ready to sink in a lot of cash into your business. Do not shy away from asking for help.

Identify the Type of Funding

Are you looking for equity funding? It might mean low-interest rates but can lead to you losing out on some control of your company. On the other hand, you can walk into a bank and convince them to give you a huge loan. The downside is that they might have a high-interest rate. Perhaps you can see how to work it down by convincing them of the suitability of your business for many people at large.

Do Your Due Diligence

roled moneyBefore getting into any financial agreement, be sure you have done all your due diligence. First, this would entail researching the funder. You do not want to get caught up in an illegal business. For example, some people are just out there looking for ways to launder money. Do not fall prey to people whose deals sound good to be true. Read for reviews and ask for any references you can rely on before committing to any agreement.

Now you have all the tips to consider when looking for startup funds for your business. These might be what you need to see your business booming. After all, having a sound financial plan for your business is always crucial.

accountant

The Best Services An Accountant Can Offer Your Business

05/07/2021 / / 0 Comments

It’s not always easy to run a business. This becomes even more difficult when you have to manage your finances. When you have a business, there can be so many things to do that it is hard to get everything done on time. Every business owner should have an accountant to help them manage their finances and make sure that everything is running smoothly.

You can hire an accountant for your business, or you can choose to have them work for you when you need them most. Therefore you need to find the best accountants for you. There are many types of bookkeeping services that accountants can offer. You should be careful when hiring them so that you get the best service possible. These are the main services that an accountant can provide to your business.

Accounting and Payroll Preparation

AccountingThis is the main function of accountants in Brisbane. It includes tasks such as recording financial transactions, preparing financial reports, and maintaining journals. Businesses need bookkeeping to manage their finances and ensure their smooth operation.

Your employees are the most important part of your business, and they should be treated accordingly. Bookkeeping helps you keep track of your employee’s wages, deductions, taxes, and other financial information so you can focus on the business. Your bookkeeper will not only keep track of wages, deductions, and bonuses, but will also prepare financial statements and help you with payroll taxes.

VAT Compilation

Many people find VAT confusing, especially when trying to figure out what they have to pay. Accounting services can simplify the process for your business. Your accountant will be able to file and complete VAT returns, negotiate tax issues and manage filing deadlines with the appropriate agencies. Your accountant will provide valuable guidance on sales tax so you can make the right decisions.

Tax Advice

Taxes can be complicated because legislation is constantly changing. This means there are always new tax rules. Professional tax consultants keep up with the latest changes. They will make sure your business is in compliance with the regulations to avoid penalties or other taxes. With the help of tax consultants, your business can reduce the amount of taxes you have to pay. You can also recover back taxes, if applicable.

Business Audits

The nature and size of a business determine the need for financial audits. Accountants who can perform audits can be very helpful. They can help you meet legal requirements, gather financial information, and analyze and compare financial statements. They can guide you on what to do next to improve your business based on the audits. The services you get from your accountant depend on how you choose them. Not only should you choose a qualified accountant, but also one you trust with your finances.

business incorporation

Choosing an Online Incorporation Service

26/11/2018 /

If you own a business, incorporation is among the things which could save your life. Incorporating your business gives it a higher ranking immediately and protects your hard earned asset, the liability of the business changes from personal to commercial. This means that the assets you acquired out of business are safe. Below are important things you should know before agreeing to company incorporation services. Read on.

  1. Get a written agreement. When it comes to any business needs, one of the best things you can do is to have a written agreement between the parties involved. In case of any disputes, you should be able to refer to the agreement.
  2. Type of entity. Before signing the written agreements, you must have chosen the entity you want to start. Using the business entity search, you can be able to decide on which entity to settle for.
  3. Equity splitting. When this term appears in your discussions, it means that two or more people share the business. Before you start running the business, you must have a clear agreement between the partner of what portions each of you is going to get.
  4. Jurisdiction. You must understand the legislation surrounding your business. This is to enable you to stay safe and not to land into legal issues. Take time to study and understand what the law requires from a business like the one you want to set up.
  5. Payment methods. There are numerous payment terms nowadays. You can use Alipay, Velmo or PayPal. However, PayPal is the simplest and most secure means of online money transfer.
  6. If you do not take the right incorporation steps, your assets might be counted as part of the business. Small business owners are advised to pay attention to this point and ensure that their assets and property is not in any way connected to the business.
  7. While setting up the incorporation, you must ensure that you get all the necessary permits. Ignoring this point means that you will have significant paperwork issues to deal with along the way.
  8. Taxation differs from states. However, we are all aware that all businesses must pay tax to the government. Evading tax is a punishable offense, and you should not lead your business this way. If you have options, it is advisable to start a business in a state with friendly taxation.
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Tips For Hiring A Good Business Accountant

03/10/2017 /

Running a successful business has never been a simple task like some people think. It is an undertaking that requires you to great efforts and determinations. If you want to have a successful business, then you will have to take note of some critical positions within a business like that of accounting. One important thing that you need to understand is that most businesses have failed because they failed in the accounting sector of business. This underscores the fact that under no circumstance should the accounting sector of a business be underestimated.

Tips For Hiring A Good Business Accountant

Find quality accounting services

accounting servicesWhile most people acknowledges the importance of accounting to business, it has never been easy to locate a good accountant. This is because most education systems have failed in one way or the other. Some educational institutions produce half-baked graduates who if you employ them, you would simply be accelerating the burial of your business. This is why you should always be keen when it comes to accounting matters of your business. If possible, you should look for a company that offers these services and outsource your accounting services. Here are some of the things that you should put into consideration whenever you need an accountant for your business.

Look for a CPA holder

Now that you already know how important accounting services are to the success of your business, you need be serious when it comes to recruitment of an accountant. The first thing that you should look for in an accountant is the CPA certifications. This is one of the tittles that is not achieved easily. So if you find a person with this title, entrusting your accounting services to them would not be a bad idea.

Right package of services

Here, you need to have a clear understanding of the services that you need from the accounting perspective. This is important as it will help you to have a viable interview that will enable you to find a good accountant. You will have to write down the accounting services that you will need the accountant to perform for you. If you find out that they interviewee can prove to you that the can do the work without much problem, then you can consider hiring them.

Price

writingYou also need to consider the cost that it will take you to hire the accountant. If they are too expensive, then it means that they might not be of much help to you. Remember that phrase that you get what you pay for is not applicable everywhere. If you find out that hiring an accountant becomes too expensive for you to manage, you can consider outsourcing your accounting services.Check out accountants Sunderland for reliable accounting services.

working

Loans For Business Startups

16/12/2016 /

Most entrepreneurs have the need to borrow money sooner or later for his or her business startup. The good news is, there is a broad range of different types of loans for business startups. Sadly, that is additionally the terrible news. At the end of the day, the money is out there. However, it can confuse to choose which type of loans for the business startup to apply for, particularly on the grounds that many loans finance particular things.

Types of loans for business startups

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Line-of-credit loans

These type of short-term loans allow you access a predefined amount of cash deposited into the business account on an as-required premise. You pay the interest on this amount that is loaned to you for the business. You can utilize line-of-credit loans to purchase stock and pay some of the operating costs for working capital, in addition to other things, however not to purchase real estate or tools and equipment.

SBA loans

The SBA backs different kinds of small-business loans made through local area banks and organizations. You can utilize these loans to purchase equipment, stock, supplies, furniture and more.

Revolving lines of credit

At the point when money lender offers a specific amount of funds to the borrower and permits a similar amount to be lent again upon repayment, it is a revolving line of credit.

 Installment loans

You pay these loans back with equal regularly scheduled installments covering both principal and interest. Installment loans might be written to meet a wide range of business needs. You get everything when the contract is marked, and interest is figured from that date to the final day of the loan. If you reimburse an installment loan before its final date, there will be no penalty and a suitable adjustment of interest.

Interim loans

While considering interim loans, bankers are worried about will’s identity paying off the loan and whether that dedication is dependable. Interim loans are utilized to make occasional installments to the contractors fabricating new offices when a mortgage on the building will be utilized to pay off the temporary loan.

Balloon loans

These loans are written under another name; you can distinguish them by the way that everything is received when the contract is marked. However, just the interest is paid off amid the life of the loan, with a “balloon” installment of the principal due on the final day.

Loans  by friends and family

Money from your frihandshakeends and relatives accompanies the greatest low-interest repayment plan you will ever get. Getting a loan from friends and family, nevertheless, carries chances. Set up with the lenders and write a repayment schedule, and follow it correctly so that thanksgiving dinner does not turn into a family battleground.

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