Question

You have started a new company that has three separate departments and employs over 50 people. You must set up an accounting system that meets your business needs, but is also legally sound. You realize some of the reports you want must be Financial Accounting Standards Board (FASB) compliant, while you have flexibility in how other reports can be structured. Match the appropriate financial document with either a Financial Accounting Standards Board report (FASB) or Flexible Internal Report.

Answer 1

Report as per FASB Guideline – Assume company relates to Software startup company with 50 + headcount . Company has to maintain following accounting documents / reports as per FASB :

1. Should follow Generally Accepted Accounting Principles
2. Presentation of Financial Statement include – consist of Balance Sheet , Statement of Shareholders Equity
3. Income Statement – reporting comprehensive Income as per FAS 130
4. Statement of Cash flow
5. Notes to financial statement
6. Earning Per share ( FAS 128)
7. Under Financial Statement Accounts – mainly includes :

1. Cash and cash Equivalent
2. Receivable
3. Inventory ( small part – Service Industry )
4. Others Assets and deferred costs
5. Intangible asset – Goodwill and others ( FAS 142)
6. Property . plan and Equipment ( FAS 144)

Liability – include mainly :

1. Deferred Revenue

Equity

Revenue – include Revenue Recognition , Revenue from contract with Customer Plus Other Income

Expenses – mainly include Cost of sales and Services , Compensation , Compensation – Employee stock option ,Other expenses , Research and development , innovation cost + Income tax

Disclosure on Financial Instrument – According to volume of transaction , Foreign currency matter

Leases – as per FAS 13

Segmental Reporting ( company presently having Three department )

Any service concession Arrangement