GAAP Financial Statements

GAAP Financial Statements

Conference Info

  • IndustryHuman Resources
  • Unique IDUSC2026346
  • Duration100 Minutes
  • DateApr 3,2026 - Jun 30,2026

Description

Overview

For many small businesses, Generally Accepted Accounting Principles (GAAP) have long been seen as overly complex and burdensome. While the Financial Accounting Standards Board (FASB) has taken steps to simplify GAAP for smaller entities, confusion and hesitation still linger around its application. This webinar is designed to strip away the mystery surrounding GAAP by breaking down its core principles in an approachable, practical format.

Participants will gain a foundational understanding of GAAP and how it contrasts with other accounting methods such as tax and cash basis. The session will also explore how GAAP influences financial reporting and tax filings, making it a crucial tool for both compliance and strategic decision-making. Whether you’re a small business owner, bookkeeper, or financial professional, this course will equip you with the confidence to navigate GAAP-based financial statements with clarity and purpose.

Your Benefits For Attending:

  1. Understand the key differences between GAAP, tax, and cash basis accounting.
  2. Learn how revenue is recognized under GAAP standards.
  3. Explore the interaction between GAAP and business tax returns.
  4. Identify and interpret the different types of auditor opinions.
  5. Gain insight into basic financial statement disclosure requirements.
  6. Discover why building familiarity with GAAP can be a strategic asset.
  7. Learning about GAAP can unlock a deeper understanding of your business’s financial health, leading to better decisions and fewer surprises during audits or financial reviews.

Who Should Attend:

Small business owners, accountants, bookkeepers, financial managers, and anyone who wants to improve their understanding of GAAP and its role in financial reporting.

Table of Contents

  1. Introduction
  2. The Aim and Purpose of Accounting
  3. The Dynamics of Balance
  4. A Brief Interlude of Debits and Credits
  5. Revenue Recognition
  6. 5-Step Approach
  7. Definition of Performance Obligation
  8. What Does “Distinct” Mean?
  9. Transaction Price Diagram
  10. Standalone Selling Price Is Key
  11. Walmart
  12. Inventory
  13. Two Basic Alternatives
  14. Potential Problem With Perpetual Inventory
  15. Perpetual Inventory System - Shrinkage
  16. Periodic Inventory System
  17. Periodic Inventory System:  Inventory Starts as Purchases
  18. Periodic Inventory System
  19. Purchases Made At Different Prices
  20. Example
  21. Example- Goods Available/Ending Inventory Count
  22. LIFO: Last In First Out
  23. FIFO: First In First Out
  24. LIFO:  Income Statement
  25. FIFO:  Income Statement
  26. The Weighted Average
  27. GAAP Accounting Vs Tax Accounting
  28. Different Objectives
  29. Basic Principles of FASB ASC 740
  30. Permanent Tax Differences
  31. Temporary Tax Differences
  32. Uncertain Tax Positions
  33. 4 Truths About Accounts Receivable
  34. Expenditure Of Cash Incurrence Of Debt
  35. The Matching Principle
  36. The Matching Principle - Salvage Value
  37. Judgments Required
  38. Valuations Based On Assets
  39. The Whole Is Greater Than The Sum Of The Parts
  40. Goodwill
  41. Equity Investments
  42. Consolidation
  43. Consolidation Continued
  44. Consolidation Criteria
  45. Enron
  46. Enron Diagram
  47. Consolidation Criteria - Interest
  48. VIE Criteria
  49. Equity Method
  50. The Equity Method Criteria
  51. Significant Influence
  52. Equity Method - Balance Sheet
  53. Fair Value Method
  54. Fair Value Method - Continued
  55. Contingent Liabilities
  56. FASB ASC 450.20 - Remote
  57. FASB ASC 450.20 - Probable
  58. FASB ASC 450.20 - Reasonably Possible
  59. FASB ASC 450.25 - 2
  60. FASB ASC 450.25 - 2 - Probable
  61. FASB ASC 450.25 - 3 - Remote
  62. FASB ASC 450.25 - 3 - Ignore
  63. Summary - Ignore/Accrue
  64. Summary - Disclose
  65. Lease Accounting
  66. Calculating ROU Asset
  67. Finance Vs. Operating Leases
  68. Financing Lease Criteria
  69. General Considerations
  70. Services Provided by Audit Firms
  71. Types Of Audit Opinions 1-3
  72. Types Of Audit Opinions - Unqualified
  73. Types Of Audit Opinions -  Qualified
  74. Types Of Audit Opinions  - Disclaimer
  75. Closing
  76. Presentation Closing

Index

  1. Accounting (ACCG)
  2. Accounts Receivable (AR)
  3. Amortization
  4. Asset
  5. Audit
  6. Balance Sheet (BS)
  7. Contract
  8. Cost
  9. Cost Of Goods Sold (COGS)
  10. Credit (CR)
  11. Debit (DR)
  12. Deferred Tax Asset
  13. Deferred Tax Liability
  14. Depreciation
  15. Distinct
  16. Equity
  17. Equity Method
  18. Expenditure
  19. Expense
  20. Fair Value Method
  21. FASB - Financial Accounting Standards Board
  22. FIFO
  23. Finance Lease
  24. Financial Statement
  25. Generally Accepted Accounting Principles (GAAP)
  26. Goodwill
  27. Income Statement
  28. Interest
  29. Inventory
  30. Lease Liability
  31. Liability
  32. LIFO
  33. Operating Lease
  34. Periodic Inventory System
  35. Perpetual Inventory System
  36. Personal Property
  37. Real Property
  38. Revenue
  39. Revenue Recognition
  40. Right-of-Use Asset (ROU Asset)
  41. Salvage Value
  42. Total Cost
  43. Transaction
  44. Transaction Price

Key Terms

ASC - Accounting Standards Codification: In US accounting practices, the Accounting Standards Codification is the current single source of United States Generally Accepted Accounting Principles. It is maintained by the Financial Accounting Standards Board.

Accounting (ACCG): A systematic way of recording and reporting financial transactions for a business or organization.

Accounts Receivable (AR): The amount of money owed by customers or clients to a business after goods or services have been delivered and/or used.

Asset: Property owned by a person or company, regarded as having value and available to meet debts, commitments or legacies.

Audit: A formal examination of an organization's or individual's accounts or financial situation

Balance Sheet (BS): A financial report that summarizes a company's assets (what it owns), liabilities (what it owes) and owner or shareholder equity at a given time.

Contract: A written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law.

Cost: The sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location

Cost Of Goods Sold (COGS): The direct expenses related to producing the goods sold by a business. The formula for calculating this will depend on what is being produced, but as an example this may include the cost of the raw materials (parts) and the amount of employee labor used in production.

Credit (CR): An accounting entry that may either decrease assets or increase liabilities and equity on the company's balance sheet, depending on the transaction. When using the double-entry accounting method there will be two recorded entries for every transaction: A credit and a debit.

Debit (DR): An accounting entry where there is either an increase in assets or a decrease in liabilities on a company's balance sheet.

Deferred Tax Asset: A deferred tax asset is an item on a company's balance sheet that reduces its taxable income in the future. Such a line item asset can be found when a business overpays its taxes. This money will eventually be returned to the business in the form of tax relief.

Deferred Tax Liability: A deferred tax liability is a listing on a company's balance sheet that records taxes that are owed but are not due to be paid until a future date. The liability is deferred due to a difference in timing between when the tax was accrued and when it is due to be paid.

Depreciation: A reduction in the value of an asset with the passage of time, due in particular to wear and tear.

Distinct: To be distinct, a good or service must meet two criteria: It must be capable of being distinct, and. It must be separately identifiable or “distinct within the context of the contract”

Equity: The total value of your business after you’ve subtracted what you owe [“liabilities”] from what you own [“assets”].

Equity Method: The equity method requires the investing company to record the investee's profits or losses in proportion to the percentage of ownership. The equity method also makes periodic adjustments to the value of the asset on the investor's balance sheet.

Expenditure: An expenditure is money spent on something. Expenditure is often used when people are talking about budgets.

Expense: Offset (an item of expenditure) as an expense against taxable income.

FASB - Financial Accounting Standards Board: The Financial Accounting Standards Board is a private standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles within the United States in the public's interest.

FIFO: FIFO and LIFO accounting are methods used in managing inventory and financial matters involving the amount of money a company has to have tied up within inventory of produced goods, raw materials, parts, components, or feedstocks.

Fair Value Method: Fair value accounting refers to the practice of measuring your business's liabilities and assets at their current market value. In other words, “fair value” is the amount that an asset could be sold for (or that a liability could be settled for) that's fair to both buyer and seller.

Finance Lease: A financial lease is generally treated like loan. Here, asset ownership is considered by the lessee, so the asset appears on the balance sheet.

Financial Statement: Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. ... A balance sheet or statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time.

Generally Accepted Accounting Principles (GAAP): A set of rules and guidelines developed by the accounting industry for companies to follow when reporting financial data. Following these rules is especially critical for all publicly traded companies.

Goodwill: Goodwill is an intangible asset that is associated with the purchase of one company by another. Specifically, a goodwill definition is the portion of the purchase price that is higher than the sum of the net fair value of all of the assets purchased in the acquisition and the liabilities assumed in the process.

Income Statement: One of the three primary financial statements used to assess a company's performance and financial position (the two others being the balance sheet and the cash flow statement). The income statement summarizes the revenues and expenses generated by the company over the entire reporting period. (investinganswers.com)

Interest : Interest is the charge for the privilege of borrowing money, typically expressed as annual percentage rate (APR). Interest can also refer to the amount of ownership a stockholder has in a company, usually expressed as a percentage.

Inventory: A company's inventory typically involves goods in three stages of production: raw goods, in-progress goods, and finished goods that are ready for sale. Inventory or stock refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilization.

LIFO: LIFO stands for “Last-In, First-Out”. It is a method used for cost flow assumption purposes in the cost of goods sold calculation. The LIFO method assumes that the most recent products added to a company’s inventory have been sold first. The costs paid for those recent products are the ones used in the calculation.

Lease Liability: In accounting, a lease liability is a financial obligation to make the payments arising from a lease, measured on a discounted basis. Lease liability is calculated using the present value of the lease payments over the lease term discounted, typically, using the lessee's incremental borrowing rate.

Liability: In financial accounting, a liability is defined as the future sacrifices of economic benefits that the entity is obliged to make to other entities as a result of past transactions or other past events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.

Operating Lease: An operating lease is generally treated like renting. That means the lease payments are treated as operating expenses and the asset does not show on the balance sheet.

Periodic Inventory System: With a periodic inventory system, a company physically counts inventory at the end of each period to determine what's on hand and the cost of goods sold. Many companies choose monthly, quarterly, or annual periods depending on their product and accounting needs.

Perpetual Inventory System: A perpetual inventory system is a system used to track and record stock levels, in which every purchase and sale of stock is logged automatically and immediately. In this system, every time a transaction takes place, the software records a change in inventory levels in real-time.

Personal Property: Personal property is something that you could pick up or move around. This includes such things as automobiles, trucks, money, stocks, bonds, furniture, clothing, bank accounts, money market funds, certificates of deposit, jewels, art, antiques, pensions, insurance, books, etc.

Real Property: Real property is land and any property attached directly to it, including any subset of land that has been improved through legal human actions. Examples of real properties can include buildings, ponds, canals, roads, and machinery, among other things

Revenue: In accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Some companies receive revenue from interest, royalties, or other fees.

Revenue Recognition: Revenue recognition is an accounting principle that outlines the specific conditions under which revenue. In accounting, the terms "sales" and "revenue" can be, and often are, used interchangeably, to mean the same thing. Revenue does not necessarily mean cash received.

Right-of-Use Asset (ROU Asset): In accounting, the right-of-use asset (ROU asset) arises from a lease agreement and represents the lessee's license to hold, operate, or occupy the leased property or item over the lease term. The asset is calculated as the initial amount of the lease liability, plus any lease payments made to the lessor before the lease commencement date, plus any initial direct costs incurred, minus any lease incentives received.

Salvage Value: Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset's estimated salvage value is an important component in the calculation of a depreciation schedule.

Straight Line Depreciation: Straight line depreciation is the most commonly used and straightforward depreciation method for allocating the cost of a capital asset. It is calculated by simply dividing the cost of an asset, less its salvage value, by the useful life of the asset.

Total Cost: Total cost is the total expenditure incurred to produce some type of output. From an accounting perspective, the total cost concept is more applicable to financial reporting, where overhead costs must be assigned to certain assets.

Transaction: In QuickBooks, a transaction type identifies what kind of transaction occurred, such as a customer transaction, bill payment or a bank transfer. When you submit a transaction, you type in a transaction code to represent it.

Transaction Price: The price of a good or service expressed relative to the same quantity of another good or service. Transaction prices help distinguish price changes due to inflation from real price changes.

Speaker(s)

  • Chuck Borek

    Chuck Borek

    Chuck Borek is a practicing attorney and founder of  the Borek Group, LLC. Chuck is also a CPA, and his background includes  five years as a partner in a public accounting firm. He received his law degree and MBA summa cum laude from the University of Baltimore in 1993, where he was editor-in-chief of the Law Review. He has been teaching professionally since 1989, including four years as an Associate Professor of Accounting and two years as a Visiting Assistant Professor of Law.? He has lectured throughout the U.S. and has conducted both live and Web-based seminars. Chuck's publications include: Legal Issues for Accountants and Auditors (BNA 2015); Borek's Maryland Business Planning Manual (MICPEL 2008); Hospital Accounting (BNA 2018), Contract Drafting and Review for the Maryland Lawyer (MSBA 2015); as well as numerous law review articles.
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