ASC 860-20: Mastering Sale Accounting Compliance with Modern Software Solutions

Posted In | ASC Accounting

The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 915-15, previously known as Statement of Financial Accounting Standards (SFAS) No. 7, is a crucial accounting standard for development stage entities (DSEs). This standard provides guidance on financial reporting and disclosure requirements for companies in their early stages, typically characterized by limited operational history, ongoing research and development activities, and the need for significant external financing. As DSEs navigate the complex landscape of accounting compliance, advanced solutions can play a crucial role in streamlining the process. This article explores the key aspects of ASC 915-15 and how advanced solutions can facilitate compliance for development-stage entities.

 

1. Understanding ASC 915-15: The Development Stage Entity Concept

ASC 915-15 defines a development stage entity as a company that has not yet started planned principal operations, lacks an established revenue base, and primarily engages in activities that support research and development, market research, or fundraising. This standard provides guidance on financial statement presentation and disclosure requirements for DSEs, which include:

 

• Income statement presentation: DSEs must present a statement of operations that discloses cumulative amounts from inception to the current reporting date for revenues, expenses, and net losses.
   
• Balance sheet presentation: DSEs must present a classified balance sheet, segregating current and non-current assets and liabilities.
   
• Cash flow statement: DSEs must present a statement of cash flows that shows the sources and uses of cash since the entity's inception.
   
• Disclosures: DSEs must disclose certain information, including a description of their principal operations, the cumulative net losses, and the risks and uncertainties associated with their operations.

 

2. Advanced Solutions for ASC 915-15 Compliance

Adopting advanced solutions can help DSEs streamline their accounting processes and ensure compliance with ASC 915-15. Some of these solutions include:

 

1. Accounting software: Implementing accounting software that caters specifically to DSEs can help automate financial statement preparation and disclosure requirements, reducing the risk of errors and saving time.
    
2. Artificial intelligence (AI) and machine learning: AI-driven tools can analyze large amounts of data and provide insights into financial trends and potential risks, enabling DSEs to make informed decisions and address potential issues proactively.
    
3. Cloud-based platforms: Utilizing cloud-based platforms for financial reporting allows DSEs to access, store, and analyze financial data securely and efficiently, improving collaboration and reducing the risk of data loss.
    
4. Expert advisory services: Engaging the services of professionals with expertise in ASC 915-15 and DSE-specific accounting can help organizations stay current with regulatory changes, implement best practices, and maintain compliance.

 

3. Benefits of Advanced Solutions for DSEs

Implementing advanced solutions can provide significant benefits to DSEs, including:
 

• Enhanced compliance: By automating financial reporting processes and leveraging expert advisory services, DSEs can ensure that their financial statements and disclosures meet ASC 915-15 requirements.
   
• Improved decision-making: AI-driven tools and cloud-based platforms can provide DSEs with valuable insights into their financial performance, enabling better decision-making and strategic planning.
   
• Cost savings: Automating accounting processes and leveraging advanced solutions can reduce manual labor costs, increase efficiency, and minimize the risk of errors.
   
• Scalability: As DSEs grow and evolve, advanced solutions can be easily scaled to accommodate their changing needs, ensuring continued compliance and streamlined operations.

Navigating the complex world of accounting compliance for development-stage entities can be challenging. By adopting advanced solutions tailored to DSE-specific requirements, organizations can streamline their financial reporting processes, ensure compliance with ASC 915-15, and focus on their core operations. In addition, these solutions offer valuable insights into financial performance, enabling better decision-making and strategic planning. As DSEs continue to grow and evolve, leveraging advanced solutions will prove instrumental in maintaining compliance, minimizing risks, and driving sustainable success.