425 East Colorado Street Suite 535F Glendale CA 91205

TECHNICAL ACCOUNTING

Our services cover understanding of relevant aspects of your business or transaction terms and helping develop appropriate accounting treatment. In many cases, the proposed accounting treatment is documented in form of accounting memos. When necessary, we prepare supporting calculations such as debt modification or lease amortization schedules. We cover all major technical areas as listed below.

ASC 606 Revenue Recognition

Implementation of new accounting standard (ASC 606), including review of customer contracts, preparing accounting memos and helping develop ASC 606 compliant accounting policies.

ASC 842 Lease Accounting

Implementation of new accounting standard (ASC 842), including preparing lease amortization schedule, journal entries and required financial statement disclosures.

ASC 718 Stock Compensation

Help determine liability vs. equity classification of the stock-based awards, identify and assist with accounting for service, performance and market conditions, prepare stock expense amortization schedules.

ASC 805 Business Combination

Help determine which accounting model to apply, i.e., variable or voting interest model, identify controlling interest, assist with accounting for contingent consideration, perform purchase price allocation, etc.

ASC 32X Financial Instruments

Understand relevant contract terms, assist with debt versus equity classification, assist with accounting for freestanding financial instruments, e.g., detachable warrants, application of derivative guidance,

including bifurcation of embedded derivatives, e.g., conversion options embedded in debt or preferred stock.

ASC 280 Segment Reporting

Help identify Chief Operating Decision Maker (CODM) and operating segments. Assistance with aggregation of operating segments into reportable segments using qualitative thresholds, including the 10% test. Assistance with segment related disclosures including entity-wide disclosures.

ASC 260 Earnings per Share

Assist with weighted average share calculations used as a denominator in basic and diluted EPS calculations. Incorporate the impact of stock options in diluted EPS calculations, using the treasury stock method. Assess the impact of potentially issuable shares due to, for example, conversion of a debt or preferred stock or exercise of a warrant on diluted EPS. Assist with calculations supporting the two-class EPS method.

ASC 470 Debt Modification

Assist with categorization of the change in debt terms as troubled debt restructuring (TDR), modification or extinguishment of term loans. Support financial difficulty and concession assessment as part of TDR analysis. Assist with calculations supporting the 10% cash flow test. Help establish proper accounting treatment for modification of convertible debt including Step 1- Evaluate the change in cash flows and Step 2 – Evaluate the change in the conversion option.

ASC 985 Software

Assist with capitalize vs. expense issues associated with cost related to software to be sold, leased or marketed. Establishing technological feasibility through a detailed program design or a working model. Capitalization of costs incurred to develop or enhance internally developed software (IDS).

ASC 830 Foreign Currency

Assist with the translation of the financial statements into a presentation currency, calculation of foreign currency exchange differences. Assist with determination of entity’s functional currency. Accounting for foreign exchange differences related to intercompany transactions.