GAAP Financial Statements

On Demand Webinar

Webinar Details $219

  • Rated:
  • Webinar Length: 100 Minutes
  • Guest Speaker:   Chuck Borek
  • Topic:   Taxation and Accounting
  • Credit:   CPE 2.0, ATATX 1.5
All Access Membership

For many years, GAAP has been considered by many smaller businesses as too burdensome to apply. The Financial Accounting Standards Board has made some progress in rendering GAAP more user-friendly, but it remains mysterious and confounding to many. This course aims to de-mystify GAAP by unpacking its basic features and illustrating how understanding GAAP-based financial statements can be a valuable, and sometimes essential, skill. 

Among the topics covered in the course are:

  • The fundamental differences between the GAAP, tax, and cash basis of accounting
  • Revenue recognition under GAAP
  • How GAAP interacts with business tax returns
  • Understanding the variety of auditor opinions
  • Basic approaches to disclosure
  • Why GAAP and you should be friends

Level: Basic
Format: Live webcast
Instructional Method: Group: Internet-based
NASBA Field of Study: Accounting
Program Prerequisites: None
Advance Preparation: None

  1. Introduction
  2. The Aim and Purpose of Accounting 00:03:40
  3. The Dynamics of Balance 00:08:05
  4. A Brief Interlude of Debits and Credits 00:10:06
  5. Revenue Recognition 00:14:22
  6. 5-Step Approach 00:15:37
  7. Definition of Performance Obligation 00:16:10
  8. What Does “Distinct” Mean? 00:17:14
  9. Transaction Price Diagram 00:18:45
  10. Standalone Selling Price Is Key 00:19:17
  11. Walmart 00:21:09
  12. Inventory 00:25:29
  13. Two Basic Alternatives 00:26:16
  14. Potential Problem With Perpetual Inventory 00:28:10
  15. Perpetual Inventory System - Shrinkage 00:28:55
  16. Periodic Inventory System 00:30:53
  17. Periodic Inventory System:  Inventory Starts as Purchases 00:32:05
  18. Periodic Inventory System 00:32:23
  19. Purchases Made At Different Prices 00:35:04
  20. Purchases Made At Different Prices Continued 00:35:58
  21. Example 00:36:48
  22. Example- Goods Available/Ending Inventory Count 00:37:09
  23. LIFO: Last In First Out 00:38:49
  24. FIFO: First In First Out 00:40:44
  25. LIFO:  Income Statement 00:42:00
  26. FIFO:  Income Statement 00:42:41
  27. The Weighted Average 00:44:22
  28. GAAP Accounting Vs Tax Accounting 00:45:04
  29. Different Objectives 00:45:16
  30. Basic Principles of FASB ASC 740 00:49:54
  31. Permanent Tax Differences 00:52:43
  32. Temporary Tax Differences 00:54:17
  33. Uncertain Tax Positions 00:55:39
  34. 4 Truths About Accounts Receivable 00:58:23
  35. Expenditure Of Cash Incurrence Of Debt 01:02:13
  36. Expenditure Of Cash Incurrence Of Debt Continued 01:05:08
  37. The Matching Principle 01:05:20
  38. The Matching Principle - Salvage Value 01:05:46
  39. Judgments Required 01:08:10
  40. Valuations Based On Assets 01:09:34
  41. The Whole Is Greater Than The Sum Of The Parts 01:10:47
  42. Goodwill 01:11:25
  43. Equity Investments 01:13:38
  44. Consolidation 01:13:46
  45. Consolidation Continued 01:13:52
  46. Consolidation Criteria 01:15:15
  47. Enron 01:15:54
  48. Enron Diagram 01:16:03
  49. Consolidation Criteria - Interest 01:16:45
  50. VIE Criteria 01:17:07
  51. Equity Method 01:18:04
  52. The Equity Method Criteria 01:18:06
  53. Significant Influence 01:18:24
  54. Equity Method - Balance Sheet 01:18:54
  55. Fair Value Method 01:14:38
  56. Fair Value Method - Continued 01:19:49
  57. Contingent Liabilities 0122:00
  58. FASB ASC 450.20 - Remote 01:24:42
  59. FASB ASC 450.20 - Probable 01:25:22
  60. FASB ASC 450.20 - Reasonably Possible 01:25:29
  61. FASB ASC 450.25 - 2 01:25:51
  62. FASB ASC 450.25 - 2 - Probable 01:27:06
  63. FASB ASC 450.25 - 3 - Remote 01:01:27:23
  64. FASB ASC 450.25 - 3 - Ignore 01:27:23
  65. Summary - Ignore/Accrue 01:27:44
  66. Summary - Disclose 01:28:02
  67. Lease Accounting 01:28:57
  68. Calculating ROU Asset 01:31:04
  69. Finance Vs. Operating Leases 01:32:57
  70. Financing Lease Criteria 01:33:44
  71. General Considerations 01:34:32
  72. Services Provided by Audit Firms 01:35:17
  73. Types Of Audit Opinions 1-3  01:37:26
  74. Types Of Audit Opinions - Unqualified 01:38:55
  75. Types Of Audit Opinions -  Qualified  01:39:47
  76. Types Of Audit Opinions  - Disclaimer 01:40:01
  77. Wrap Up 01:40:14
  78. Closing 01:40:42
  • Accelerated Depreciation 01:07:01
  • Accounting (ACCG) 00:02:59, 00:04:30, 00:08:06, 00:10:13, 00:13:02, 00:27:00, 00:43:17, 00:51:40
  • Accounts Payable (AP) 00:13:12
  • Accounts Receivable (AR) 00:58:23
  • Amortization 01:04:05
  • ASC - Accounting Standards Codification 01:14:47, 01:24:56
  • Asset 00:09:11, 00:25:53, 00:54:07, 01:04:10, 01:08:27, 01:16:19, 01:29:29, 01:33:39
  • Audit 00:46:18, 00:54:37, 00:57:17, 01:35:28
  • Balance Sheet (BS) 00:08:19, 00:08:40, 00:44:06, 00:47:26, 01:03:49, 01:20:57, 01:27:31
  • Cash Flow Statement 00:08:26
  • Contract  00:16:14, 00:18:20, 00:47:04, 01:16:28
  • Cost 01:03:38, 01:19:00
  • Cost Of Goods Sold (COGS) 00:31:36, 00:34:48, 00:40:13, 00:41:36, 00:44:10
  • Credit (CR) 00:06:19, 00:10:09, 00:10:44
  • Debit (DR) 00:06:18, 00:10:09, 00:10:39
  • Deferred Tax Asset 00:49:54
  • Deferred Tax Liability 00:52:34
  • Depreciation 00:54:00, 01:04:04, 01:07:47
  • Distinct 00:17:16, 00:18:10
  • Equity Method 01:18:53
  • Expenditure 01:03:04, 01:04:38
  • Expense 00:50:32, 00:53:21, 00:54:52, 01:00:58
  • Fair Value Method 01:19:45
  • FASB - Financial Accounting Standards Board 00:07:07, 00:14:41, 00:45:23, 00:50:14, 00:54:25, 01:29:26
  • FIFO 00:40:44, 00:42:41
  • Finance Lease 01:32:57
  • Financial Statement 00:21:12, 00:43:10, 00:49:59, 00:52:14, 01:37:36
  • Generally Accepted Accounting Principles (GAAP) 00:03:04, 00:08:36, 00:36:46, 00:43:13, 00:45:08, 01:08:59, 01:15:43, 01:22:08
  • Goodwill 01:11:25
  • Income Statement 00:08:22, 00:42:29, 00:42:50, 01:03:47
  • Interest 00:52:55
  • Inventory 00:07:55, 00:25:30, 00:29:45, 00:33:03, 00:35:49, 00:40:12, 00:43:05, 01:04:46
  • Invoice 01:02:37
  • Lease Liability 01:28:57
  • Liability 00:50:04, 00:52:26, 01:16:19, 01:23:42, 01:29:52
  • LIFO 00:38:51, 00:42:19
  • Operating Lease 01:32:57
  • Periodic Inventory System 00:30:57
  • Perpetual Inventory System 00:28:18
  • Personal Property 01:34:32
  • Real Property 01:34:33
  • Revenue 00:14:29, 00:16:04, 00:18:48, 00:24:18. 00:26:04, 00:50:31, 01:01:03, 01:06:29
  • Revenue Recognition 00:06:37, 00:14:25, 00:21:18, 00:23:53
  • Right-of-Use Asset (ROU Asset) 01:29:47, 01:31:09, 01:35:09
  • Salvage Value 01:05:46, 01:08:41
  • Straight Line Depreciation 01:06:51
  • Total Cost  01:08:17
  • Transaction Price 00:15:57, 00:18:52, 00:19:33, 00:32:40

ASC - Accounting Standards Codification: In US accounting practices, the Accounting Standards Codification is the current single source of United States Generally Accepted Accounting Principles. It is maintained by the Financial Accounting Standards Board.

Accelerated Depreciation: Accelerated depreciation refers to any one of several methods by which a company, for 'financial accounting' or tax purposes, depreciates a fixed asset in such a way that the amount of depreciation taken each year is higher during the earlier years of an asset's life.

Accounting (ACCG): A systematic way of recording and reporting financial transactions for a business or organization.

Accounts Payable (AP): The amount of money a company owes creditors (suppliers, etc.) in return for goods and/or services they have delivered.

Accounts Receivable (AR): The amount of money owed by customers or clients to a business after goods or services have been delivered and/or used.

Asset: Property owned by a person or company, regarded as having value and available to meet debts, commitments or legacies.

Audit: A formal examination of an organization's or individual's accounts or financial situation

Balance Sheet (BS): A financial report that summarizes a company's assets (what it owns), liabilities (what it owes) and owner or shareholder equity at a given time.

Cash Flow Statement: In financial accounting, a cash flow statement, also known as statement of cash flows, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities.

Contract: A written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law.

Cost: The sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location

Cost Of Goods Sold (COGS): The direct expenses related to producing the goods sold by a business. The formula for calculating this will depend on what is being produced, but as an example this may include the cost of the raw materials (parts) and the amount of employee labor used in production.

Credit (CR): An accounting entry that may either decrease assets or increase liabilities and equity on the company's balance sheet, depending on the transaction. When using the double-entry accounting method there will be two recorded entries for every transaction: A credit and a debit.

Debit (DR): An accounting entry where there is either an increase in assets or a decrease in liabilities on a company's balance sheet.

Deferred Tax Asset: A deferred tax asset is an item on a company's balance sheet that reduces its taxable income in the future. Such a line item asset can be found when a business overpays its taxes. This money will eventually be returned to the business in the form of tax relief.

Deferred Tax Liability: A deferred tax liability is a listing on a company's balance sheet that records taxes that are owed but are not due to be paid until a future date. The liability is deferred due to a difference in timing between when the tax was accrued and when it is due to be paid.

Depreciation: A reduction in the value of an asset with the passage of time, due in particular to wear and tear.

Distinct: To be distinct, a good or service must meet two criteria: It must be capable of being distinct, and. It must be separately identifiable or “distinct within the context of the contract”

Equity Method: The equity method requires the investing company to record the investee's profits or losses in proportion to the percentage of ownership. The equity method also makes periodic adjustments to the value of the asset on the investor's balance sheet.

Expenditure: An expenditure is money spent on something. Expenditure is often used when people are talking about budgets.

Expense: Offset (an item of expenditure) as an expense against taxable income.

FASB - Financial Accounting Standards Board: The Financial Accounting Standards Board is a private standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles within the United States in the public's interest.

FIFO: FIFO and LIFO accounting are methods used in managing inventory and financial matters involving the amount of money a company has to have tied up within inventory of produced goods, raw materials, parts, components, or feedstocks.

Fair Value Method: Fair value accounting refers to the practice of measuring your business's liabilities and assets at their current market value. In other words, “fair value” is the amount that an asset could be sold for (or that a liability could be settled for) that's fair to both buyer and seller.

Finance Lease: A financial lease is generally treated like loan. Here, asset ownership is considered by the lessee, so the asset appears on the balance sheet.

Financial Statement: Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. ... A balance sheet or statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time.

Generally Accepted Accounting Principles (GAAP): A set of rules and guidelines developed by the accounting industry for companies to follow when reporting financial data. Following these rules is especially critical for all publicly traded companies.

Goodwill: Goodwill is an intangible asset that is associated with the purchase of one company by another. Specifically, a goodwill definition is the portion of the purchase price that is higher than the sum of the net fair value of all of the assets purchased in the acquisition and the liabilities assumed in the process.

Income Statement: One of the three primary financial statements used to assess a company's performance and financial position (the two others being the balance sheet and the cash flow statement). The income statement summarizes the revenues and expenses generated by the company over the entire reporting period. (investinganswers.com)

Interest : Interest is the charge for the privilege of borrowing money, typically expressed as annual percentage rate (APR). Interest can also refer to the amount of ownership a stockholder has in a company, usually expressed as a percentage.

Inventory: A company's inventory typically involves goods in three stages of production: raw goods, in-progress goods, and finished goods that are ready for sale. Inventory or stock refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilization.

Invoice: An invoice, bill or tab is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer. Payment terms are usually stated on the invoice.

LIFO: LIFO stands for “Last-In, First-Out”. It is a method used for cost flow assumption purposes in the cost of goods sold calculation. The LIFO method assumes that the most recent products added to a company’s inventory have been sold first. The costs paid for those recent products are the ones used in the calculation.

Lease Liability: In accounting, a lease liability is a financial obligation to make the payments arising from a lease, measured on a discounted basis. Lease liability is calculated using the present value of the lease payments over the lease term discounted, typically, using the lessee's incremental borrowing rate.

Liability: In financial accounting, a liability is defined as the future sacrifices of economic benefits that the entity is obliged to make to other entities as a result of past transactions or other past events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.

Operating Lease: An operating lease is generally treated like renting. That means the lease payments are treated as operating expenses and the asset does not show on the balance sheet.

Periodic Inventory System: With a periodic inventory system, a company physically counts inventory at the end of each period to determine what's on hand and the cost of goods sold. Many companies choose monthly, quarterly, or annual periods depending on their product and accounting needs.

Perpetual Inventory System: A perpetual inventory system is a system used to track and record stock levels, in which every purchase and sale of stock is logged automatically and immediately. In this system, every time a transaction takes place, the software records a change in inventory levels in real-time.

Personal Property: Personal property is something that you could pick up or move around. This includes such things as automobiles, trucks, money, stocks, bonds, furniture, clothing, bank accounts, money market funds, certificates of deposit, jewels, art, antiques, pensions, insurance, books, etc.

Real Property: Real property is land and any property attached directly to it, including any subset of land that has been improved through legal human actions. Examples of real properties can include buildings, ponds, canals, roads, and machinery, among other things

Revenue: In accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Some companies receive revenue from interest, royalties, or other fees.

Revenue Recognition: Revenue recognition is an accounting principle that outlines the specific conditions under which revenue. In accounting, the terms "sales" and "revenue" can be, and often are, used interchangeably, to mean the same thing. Revenue does not necessarily mean cash received.

Right-of-Use Asset (ROU Asset): In accounting, the right-of-use asset (ROU asset) arises from a lease agreement and represents the lessee's license to hold, operate, or occupy the leased property or item over the lease term. The asset is calculated as the initial amount of the lease liability, plus any lease payments made to the lessor before the lease commencement date, plus any initial direct costs incurred, minus any lease incentives received.

Salvage Value: Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset's estimated salvage value is an important component in the calculation of a depreciation schedule.

Straight Line Depreciation: Straight line depreciation is the most commonly used and straightforward depreciation method for allocating the cost of a capital asset. It is calculated by simply dividing the cost of an asset, less its salvage value, by the useful life of the asset.

Total Cost: Total cost is the total expenditure incurred to produce some type of output. From an accounting perspective, the total cost concept is more applicable to financial reporting, where overhead costs must be assigned to certain assets.

Transaction Price: The price of a good or service expressed relative to the same quantity of another good or service. Transaction prices help distinguish price changes due to inflation from real price changes.


Guest Speaker

  • Chuck Borek

CPE Credit

Continuing Professional Education

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You must answer all questions during the webinar, view the recording completely and pass the test at the end with 70% correct answers to receive CPE credit.

ATATX Credit

Aurora Training Advantage is offering continuing education points designed to recognize dedication to training and excellence in accounting.