Today, companies have a wide variety of ways to obtain funding, build partnerships and create value for their customers – but many of these transactions and agreements raise complex accounting issues regarding how the company should represent these matters in its financial statements.
The proper accounting for significant business activities requires the application of complex and rapidly evolving accounting principles. Without specialized expertise and experience, companies run the risk of improper accounting, which can result in adjustments that materially impact financial statements.
As experts in helping businesses successfully navigate the labyrinth of complex technical accounting requirements, we’ve outlined everything you need to know about technical accounting consultants.
Things to know about Technical Accounting Consultants:
- What is Technical Accounting?
- What does a Technical Accounting Consultant do?
- What are the benefits of hiring a Technical Accounting Consultant?
- When should you hire a Technical Accounting Consultant?
What is Technical Accounting?
Technical accounting involves the interpretation and application of accounting standards, such as accounting principles generally accepted in the U.S. (US GAAP) or international financial reporting standards (IFRS).
The application of these standards frequently requires nuanced judgments or the consideration and analysis of seemingly conflicting information.
Our technical accounting team help clients analyze and interpret accounting standards to the individual company facts and circumstances, develop accounting policies and best practices, as needed, and ensure compliance with applicable financial reporting requirements.
The extensive experience of our technical accounting experts also allows them to function as a critical liaison between company management, external auditors, attorneys and other professional service providers necessary to ensure a comprehensive analysis is completed for any unique area of accounting.
Our goal is to develop an accurate, compliant and reliable financial reporting function so you can make informed decisions for growth.
Common Technical Accounting activities:
- Implementation of New Accounting Standards: Drive efficient adoption of new accounting standards.
- Equity & Debt Financing: Evaluate debt and equity arrangements, identify unique terms and determine the appropriate accounting.
- Share-based Compensation: Complete calculations, prepare white papers and assist in identifying and addressing the accounting impact of select business events on equity awards.
- Audit Support: Assist with risk identification, scoping, prioritization and preparation of deliverables and management of the auditing process.
- M&A Transactions: Identify purchase accounting/disposition accounting complexities, prepare related white paper, including adjustments and provide support for operational accounting transition activities.
- IPO/SPAC Preparation: Assist with IPO/SPAC process project management and navigating GAAP and SEC reporting requirements.
- Financial Statement Preparation: Prepare financial statements and footnote disclosures for private and public companies in accordance with applicable reporting requirements.
- Revenue Recognition: Evaluate and/or establish revenue recognition processes, including review of contracts with customers, to ensure compliance with ASC 606.
- Other: Assist in additional areas of complexities, such as F/X, complex consolidation, derivatives and hedge accounting, lease accounting, recapitalizations, capitalized software, segment reporting, and impairment assessments.
What does a Technical Accounting Consultant do?
Technical accounting consultants are well-versed in specialized and complex areas of accounting, such as purchase accounting, revenue recognition, lease accounting and equity restructurings.
Technical accounting consultants use their experience and judgment in interpreting and applying accounting standards, researching accounting issues, developing accounting policies and ensuring compliance with relevant financial reporting and regulatory requirements.
A technical accounting consultant also works to analyze and identify improvements to finance and accounting processes to ensure accounting standards, regulations and best practices are being met across the entire organization.
Whether you need assistance with one-off projects or a full-service technical accounting department, a skilled technical accounting consultant will work diligently to ensure resources are allocated to where they’re most needed to drive project completion and success.
Common skills & duties of technical accounting consultants:
- Assisting in the research, evaluation of alternative policy elections, analysis, calculation and documentation necessary for the effective and efficient adoption of new accounting laws, regulations, standards and best practices
- Developing and implementing a scalable and efficient accounting model
- Drafting a comprehensive set of financial statements
- Handling auditor, lender or stakeholder requests
- Working with high-level executives and department leaders to ensure alignment
- Providing support for a business transaction or transformation, whether M&A, IPO/SPAC or other activity
What are the benefits of hiring a Technical Accounting Consultant?
- Access to specialized industry expertise regarding accounting topics and external reporting
- Development of a strong technical accounting function that suits business needs and goals
- A reduction in risk by ensuring compliance with relevant standards and regulatory requirements
- Cross-functional collaboration across teams, ensuring a comprehensive understanding is taken into consideration for any recommended changes to accounting or financial reporting processes
- A more efficient audit process
- Time and money saved as resources are allocated to where they’re most needed
When should you hire a Technical Accounting Consultant?
Engaging the services of a technical accounting consultant becomes important once companies enter into transactions for which the accounting under GAAP is complex, highly subjective, requires specialized expertise, or is rapidly evolving.
If the company’s financial statements are required to be audited, then the need for technical accounting experts becomes even more pronounced.
Signs it’s time to hire a Technical Accounting Consultant:
- You’re having difficulty implementing new accounting standards or adhering to new regulations
- You’re embarking on an initial audit and need help preparing audit deliverables, addressing issues and juggling auditor requests
- You’re gearing up for a complex M&A or IPO/SPAC transaction
- You’re going through a period of rapid growth and need help identifying and understanding accounting complexities of unique contractual arrangements
- You’re existing accounting team is stretched too thin with its existing workload to address a new area of accounting
Looking for Technical Accounting Expertise?
Kranz consultants have proven experience in working with both public and private companies across multiple industries. Comprised of talented and skilled individuals with extensive years of public accounting expertise, our team has the requisite experience to address each company’s specific technical accounting needs through a project-based, value-driven approach.
Contact us today or learn more about our technical accounting services at the link below.