Professional Accounting Blog

    Accounting For Your Prosperity

    John Nicklas

    John Nicklas is a Vice President of the Assurance Service Group. He has 19+ years of experience serving accounting and business advisory needs.

    Recent Posts

    Accounting for Merger and Acquisition Transaction Costs

    Posted by John Nicklas on Apr 25, 2018 11:33:37 AM

    Topics: Accounting & Auditing

    Prior to 2009, merger and acquisition (M&A) transaction costs were capitalized and recorded as part of the purchase price of a business combination. But with the issuance of FASB 141-Revised (which became effective in late 2008 or 2009), things changed dramatically. Under the revised Generally Accepted Accounting Principles (GAAP) guidelines, direct M&A transaction costs now needed to be treated separately from the business combination and expensed as occurred. This was a big change and a big topic of conversation almost 20 years ago. It also had a significant impact on the bottom line of many company’s P&Ls. Even today, many CPAs and acquisition teams struggle with the accounting and tax treatment of acquisition costs. Below we will discuss the various types of costs and the general accounting and tax treatment.

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    Financial Budgets – Should I Prepare One?

    Posted by John Nicklas on Jun 1, 2017 2:01:49 PM

    Topics: Accounting & Auditing

    The simple answer is yes. But what is your purpose for preparing one? How will it be used? And what can it do for your organization?

    A budget is more than an excel template that needs to be completed as part of the monthly, accounting closing process. A budget should be a tool that is used to help the organization focus on their commitments and to achieve specific and well-defined goals. I have seen budgets used for two primary purposes or a combination of both: (1) planning and forecasting and (2) control and oversight.

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    Statement of Cash Flows – Don’t Overlook the Meaningful Information that it Provides

    Posted by John Nicklas on Oct 11, 2016 8:22:45 AM

    Topics: Accounting & Auditing

    When most business owners and professionals look at a complete set of financial statements, they seem to focus on the income statement and look at net income or the bottom line to determine whether they had a “good year” or not. Or maybe they look at the balance sheet to see how much cash they have or their debt balance to determine how much more is owed to the bank.

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    Do I Need a Board of Directors?

    Posted by John Nicklas on May 17, 2016 10:28:22 AM

    Topics: Small Business

    Business owners are great people. Without them, no one would have a place to work (unless you work for the government). So we should all say “Thank You”!  Most business owners are risk takers, very decisive and very motivated. They have the vision and the energy to execute that vision. The future of the business and its employees rests on the shoulders of the business owner. But who looks out for the best interest of business owner and the businesses they created? Besides your outside trusted advisors (CPAs, attorneys and bankers), all business owners should consider a board of directors.

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    3 Key Factors of Business Ventures

    Posted by John Nicklas on Oct 27, 2015 3:07:59 PM

    Topics: Small Business, Accounting & Auditing

    Over 20 years ago, I graduated from college (Miami University in Oxford, Ohio). I think that I was well educated and well prepared for the working world. During senior year I took a class about buying, selling and starting your own business. The class was not taught by a professor. It was taught by a retired businessman who started and sold many business in his career.  Some of these ventures were successful and some were failures. We studied all of his business ventures and many other case studies (no textbooks were used). He retired a very wealthy man and decided to share his knowledge at Miami. Unfortunately, I do not remember the instructor’s name. 

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    U.S. GAAP and IFRS – Convergence or Divergence?

    Posted by John Nicklas on Oct 8, 2015 9:30:00 AM

    Topics: Accounting & Auditing

    In 2002 the FASB and the IASB signed an agreement or a memorandum of understanding on the convergence of accounting standards. The short-term goal of the project was to fix deficiencies in both standards. The long-term hope was to eliminate differences between the two standards, create a single accounting language and to unite the global economies with one set of rules to measure the financial performance of all businesses.

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    Common Foreign Financial Reporting Mistakes

    Posted by John Nicklas on Jun 25, 2015 11:00:00 AM

    Topics: Accounting & Auditing

    U.S. businesses (large and small organizations) continue to expand operations into overseas markets via the creation of subsidiaries and joint ventures agreements. These companies choose to invest in foreign markets for different reasons:

    • Businesses go overseas to find new customers or maintain relationships with existing customers.
    • A company may find better or less-expensive resources overseas to produce its product which could include labor, capital, natural resources or logistics/distribution channels, etc. 

    There are many challenges that impact multinational companies. The focus of this article is to highlight the most common financial reporting difficulties or mistakes that U.S. parent companies make when reporting foreign related results and transactions.

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    Understanding the U.S. Standards for Group Audits: What You Need to Know

    Posted by John Nicklas on Jan 29, 2015 10:02:41 AM

    Topics: Accounting & Auditing

    The AICPA issued a new auditing standard, AU-C Section 600, Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors), in 2012 to clarify the auditing standards and to provide additional guidance for audits of group financial statements when part of the work is performed by other auditors. The standard was effective for audit periods ending on or after December 15, 2012. 

    This article will discuss some of the highlights and requirements of the standard.

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    A CPA’s (Inventory Observation) Christmas Carol

    Posted by John Nicklas on Dec 2, 2014 4:12:06 PM

    Topics: Accounting & Auditing

    Twas the night before New Year’s, and all through the warehouse,
    Not a creature was stirring, not even a mouse.
    The tags were hung on the boxes with care,
    In hopes that the auditors soon would be there.

    Year-end inventory is a special time of year for a CPA, a time when a large number on a balance sheet comes to life. It’s when we get to see first-hand what a business does. It gives us the opportunity to interact with a group of employees that we may not otherwise get an opportunity to speak to, employees with a viewpoint of the Company’s operations that is not based on the numbers found in financial reports.

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    How to Protect Against Ghost Employee Fraud

    Posted by John Nicklas on Nov 6, 2014 3:48:00 PM

    Topics: Accounting & Auditing

    If someone were to ask you “How many employees are at your Company?” would you know the answer? If you’re a small-business owner, you may, but if your business has grown rapidly over the last few years, you may not. Whether you know the number or not, the real question is: do you utilize this to your advantage? Something as minuscule as knowing the total number of employees can be a valuable tool in identifying fraud at your Company.

    The elusive Search for Ghost Employees is a tactic us auditors have adopted and use quite frequently. A ghost employee is someone on the payroll who doesn't actually work at the company. Through the falsification of personnel or payroll records a fraudster causes paychecks to be generated to a ghost. The fraudster or an accomplice then converts these paychecks.

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