Sometimes questions arise over areas that are new to your company, but common to other companies. Other times, the transaction is completely unique. It may require in-depth analysis and may even lead to discussions with the SEC and a pre-clearance or no action letter from them.
In all cases, we’ll first take time to understand the facts surrounding the issue.
If it’s an unusual transaction for your company, but other companies deal with it regularly (for example, it might be the first time you’re issuing stock options), then we may just provide you with templates and standard financial statement disclosure used by other companies. Sometimes, if there is a little nuance to your issue, we may provide a technical memo for your auditors on that piece of it.
If the issue is not common for other companies, we will search through the various authoritative literature, whether it’s from the SEC, FASB or AICPA, and develop a position for your specific fact pattern.
We will document the position, and authoritative support for the position, in a detailed technical consulting memo that we will then discuss with you.
When we receive approval from you, we will then go over it with your auditors to make sure they are in agreement. Occasionally, they will have a different opinion on the issue. If this happens, we will work with you and them to come to a mutually agreeable position on the matter.
A sample of recent areas we’ve dealt with include (in order of appearance in financial statements):
Options and Warrants
Earnings Per Share
Mergers and Acquisitions