GAAP Preparation of Financial Statements and Presentation in Accordance with ASC 205
Author: Lynn Fountain
| CPE Credit: |
2 hours for CPAs |
Generally accepted accounting principles (GAAP) are a set of rules that encompass the details, complexities, and legalities of business and corporate accounting. The Financial Accounting Standards Board (FASB) uses GAAP as the foundation for its comprehensive set of approved accounting methods and practices. GAAP incorporates 10 key GAAP Principles that should be employed when developing financial information and financial statements.
Compliance with these GAAP principles is built on three rules that eliminate misleading accounting and financial reporting practices. These rules create consistent accounting and reporting standards, which provide prospective and existing investors with reliable methods of evaluating an organization’s financial standing.
Per GAAP, companies are responsible for providing reports on their cash flows, profit-making operations and overall financial conditions. There are three major financial statements required under GAAP:
• Income statement
• Balance sheet
• Cash flow statement
Presentation of the Financial Statements in accordance with GAAP is governed by ASC-205. The Standard defines the following as a full set of financial statements:
• Financial position at the end of the period
• Earnings, which may be shown in a separate statement or within one continuous statement of comprehensive income
• Comprehensive income for the period in one statement or two consecutive statements
• Cash flows during the period
• Investments by and distributions to the owners during the period.
This course will focus on the GAAP principles for proper preparation of financial statements. We will highlight the concepts in ASC 205 regarding presentation of those financial statements.
Publication Date: May 2019
Designed For
CEOs, CFOs, Controllers, Finance Professionals, Accounting professionals, Business owners, Management, Auditors, Board of Directors, Audit Committee members, Compliance and Legal Professional, and any professional wanting to learn more about financial statement principles and preparation.
Topics Covered
- GAAP History
- GAAP Assumptions
- GAAP Principles
- Considerations
- Rules and Standards
- Balance Sheet Section One: Assets
- Balance Sheet Liabilities: Section Two
- Balance Sheet Section Three: Stockholder's Equity
- Balance Sheet Principle Analysis
- Income Statement
- Statement of Comprehensive Income
- Cash Flow
- Stockholders Equity
- ASC 205
Learning Objectives
- Recognize the history of GAAP and its importance to the accounting profession
- Identify how to evaluate the GAAP assumptions, principles and considerations and their application
- Describe the GAAP rules and standards
- Identify how to apply GAAP to the financial statements
- Recognize and apply ASC 205 Application
- Identify the three categories of guidance
- Describe requirements of the "matching principle"
- Differentiate expectations required of accountants
- Describe examples of a contra-asset account
- Recognize what the principle of conservatism sometimes result in, in regards to the balance sheet
- Identify the three primary sections of the cash flow statement
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Accounting (2 hours)
Program Prerequisites
None
Advance Preparation
None
