Technical Research and Guidance

The pace of change and the complexity of accounting standards has made it difficult for many financial professionals to stay current. Breakwater’s financial reporting specialists proactively stay on top of new accounting guidance which reduces the time and effort spent by your staff to interpret the accounting standards, assess alternative treatments and conclude on the appropriate accounting treatment.

With Breakwater as your strategic financial reporting partner, your organization will gain access to highly skilled expertise on an “as-needed” basis.

A selection of recent technical research and guidance we have provided to our clients includes:

Stock-based compensation including:

  • Assessment of assumptions underlying Black-Scholes option pricing model
  • Accounting for modified stock options
  • Impact of a stock option modification occurring during a black-out period
  • Accounting for stock option grants subject to shareholder approval

Consolidations:

  • Assessment of entity relationships to determine appropriate accounting method (subsidiary, variable interest entity, equity investee, joint venture)
  • Non-controlling interest calculations where the subsidiary grants equity instruments including stock options or warrants
  • Functional currency analysis for global organizations

Business combinations:

  • Purchase price allocation
  • Impact of equity issued to employees of acquired entity under a continuing employment relationship
  • Contingent consideration
  • Future income tax considerations

Future income tax accounting:

  • Impact of utilization of previously unrecognized loss carryforwards of an acquired company
  • Analysis of valuation allowance for future tax benefits
  • Analysis of uncertainty in accounting for income taxes

Long-lived assets impairment:

  • Analysis of impairment based on forecasted cash flows

Financial instruments:

  • Identification and assessment of embedded derivatives in non-derivative contracts

US GAAP Reconciliation:

  • Item 17 and Item 18 US GAAP reconciliations
  • Application of FIN 48, Uncertainty in Income Taxes