The company that I work for was just acquired by a private equity firm. The company has a cash basis accounting. We now need to audit our opening balances (post-acquisition).
Do I need to first convert cash basis accounting to GAAP basis pre-acquisition, and then adjust assets and add goodwill?
Following acquisition, do I need to convert cash basis accounting to GAAP basis pre-acquisition?
Answers
We suggest that you confirm with the new ownership that accrual based accounting is the desired set of books and records.
Once they confirm this fact, then you will need to update your accounting to comply with US GAAP accounting standards.
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Accounting