• First Reference
  • About us
  • Contact us
  • Blog Signup 📨

First Reference Talks

Discussions on Human Resources, Employment Law, Payroll and Internal Controls

  • Home
  • About
  • Archives
  • Conference
  • Resources
  • Buy Policies
You are here: Home / Business / Generally accepted accounting principles for interim reporting

By Jeffrey Sherman, MBA, FCPA, FCA | 2 Minutes Read April 7, 2014

Generally accepted accounting principles for interim reporting

Illustration: Mike Constable | camagazine.com
In many small and even medium-sized companies, financial reporting during the year does not include all of the adjustments made at the year-end (often in connection with the audit or review of the annual financial statements by an independent professional accountant). Sometimes, the missing adjustments are not readily available during the year, such as a management bonus that depends upon total net income or a tax provision that cannot be fully determined until the tax returns are prepared. Other adjustments are not prepared simply because no one chooses to focus on them.
Typical “adjustments” that are often only prepared at year-end include:

 

ray ban outlet
cheap ray ban sunglasses
ray ban sunglasses sale
  • Bad debt provisions
  • Overheads in cost of sales and inventory
  • Warranty reserves
  • Write-offs of obsolete or damaged inventory
  • Depreciation expenses, updated for fixed asset acquisitions or disposals
  • Interest expenses, updated for new debt or retired debt
  • Dividends
  • Bonuses
  • Royalties receivable or payable
  • Income tax expenses
  • Current portion of long-term debt
  • Capital leases

However, some of these items may be significant to understanding the company’s monthly or quarterly results. Management, investors and bankers often carefully review changes from month to month or quarter to quarter. Before attempting to compare monthly or quarterly results, organizations should contemplate numerous adjustments, otherwise the results may be misleading; consider, for instance, providing for obsolete inventory, bad debts, warranty costs and any other similar items, and estimates for income tax expense and bonus expense.
Readers can find more information on these adjustments in policy FN 7.01 – Generally Accepted Accounting Principles in Finance and Accounting PolicyPro.
For smaller enterprises that have not previously followed the practice of preparing GAAP-based financial statements even at year-end due to their cost or complexity, CPA Canada’s Accounting Standards for Private Enterprises may make it more cost effective to prepare financial statements that follow GAAP. This will make your banker and investors much happier.

  • About
  • Latest Posts
Jeffrey Sherman, MBA, FCPA, FCA
CFO at Atrium Mortgage Investment Corporation (TSX:AI)
Jeffrey is CFO of Atrium Mortgage Investment Corporation (TSX:AI), a director of several companies and has had over 20 years of executive management experience. His interests include corporate governance, risk management, accounting and finance, restructuring and start-up enterprises.

Jeffrey is a popular presenter, and was an adjunct professor at York University for 15 years. He is a frequent course director and course author for many organizations, including provincial bodies of Chartered Professional Accountants across Canada.

He has written over 20 books including: Canadian Treasury Management, Canadian Risk Management, and Financial Instruments: A Guide for Financial Managers (all published by Thomson-Reuters/Carswell), as well as Finance and Accounting PolicyPro and Information Technology PolicyPro (guides to governance, procedures, and internal control), and Cash Management Toolkit for Small and Medium Businesses (all published by Chartered Professional Accountants of Canada [CPA Canada]).
Latest posts by Jeffrey Sherman, MBA, FCPA, FCA (see all)
  • How does IT recovery planning differ from business continuity planning? - August 4, 2015
  • How to manage bank accounts: the basics - July 6, 2015
  • Refresher on financial statistics and metrics - April 6, 2015

Article by Jeffrey Sherman, MBA, FCPA, FCA / Business, Finance and Accounting / Accounting Standards for Private Enterprises, ASPE, bad debt, bonuses, capital leases, depreciation expenses, dividends, FAPP, Finance and Accounting PolicyPro, financial statements, GAAP, generally accepted accounting principles, interest expenses, inventory overhead, long-term debt, missing adjustments, royalties, sales overhead, tax returns, total net income, warranty reserves, write-offs, year-end adjustments

Share with a friend or colleague

Get the Latest Posts in your Inbox for Free!

About Jeffrey Sherman, MBA, FCPA, FCA

Jeffrey is CFO of Atrium Mortgage Investment Corporation (TSX:AI), a director of several companies and has had over 20 years of executive management experience. His interests include corporate governance, risk management, accounting and finance, restructuring and start-up enterprises.

Jeffrey is a popular presenter, and was an adjunct professor at York University for 15 years. He is a frequent course director and course author for many organizations, including provincial bodies of Chartered Professional Accountants across Canada.

He has written over 20 books including: Canadian Treasury Management, Canadian Risk Management, and Financial Instruments: A Guide for Financial Managers (all published by Thomson-Reuters/Carswell), as well as Finance and Accounting PolicyPro and Information Technology PolicyPro (guides to governance, procedures, and internal control), and Cash Management Toolkit for Small and Medium Businesses (all published by Chartered Professional Accountants of Canada [CPA Canada]).

Footer

About us

Established in 1995, First Reference is the leading publisher of up to date, practical and authoritative HR compliance and policy databases that are essential to ensure organizations meet their due diligence and duty of care requirements.

First Reference Talks

  • Home
  • About
  • Archives
  • Conference
  • Resources
  • Buy Policies

Main Menu

  • About First Reference
  • Resources
  • Contact us
  • 1 800 750 8175

Stay Connected

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

We welcome your comments on our blog articles. However, we do not respond to specific legal questions in this space.
We do not provide any form of legal advice or legal opinion. Please consult a lawyer in your jurisdiction or try one of our products.


Copyright © 2009 - 2022 · First Reference Inc. · All Rights Reserved
Legal and Copyright Notices · Publisher's Disclaimer · Privacy Policy · Accessibility Policy