Protecting Law Firms With Effective Trust Fund Accounting

A client trust account (TA) is an important part of any law firm's business. These accounts are used to cover the expense of a client's involvement with the firm. As such, these trust accounts (TAs), no matter their size, have specific limitations placed on them that the law firm must abide by. Failing to do so can result in serious legal sanctions and even the possibility of disbarment.

The most important fact when considering how to handle a trust funds accounting is the iron clad rule that the trust fund cannot be used to benefit the lawyer or the law firm. This includes direct payments, or the use of trust fund monies to assist in the operation of the law firm. In addition, any use of a TA must be noted as such, including the purpose for which it was used and the name of both the client and lawyer. Should a question be raised about the use of the trust fund, the lawyer or law firm must be able to provide accurate records that demonstrate that at no point have any of the funds been used for disallowed purposes.

What Form Of Financial Forecasting Works Best?

Financial forecasting is one way to predict how well your business will do in the future. You can use financial forecasting to:

- Take an educated guess of how successful a new product launch might be

- Decide whether to take specific financial actions, such as hiring more employees, giving raises, or leasing new office space

- Solicit funding from investors or loans from banks

There are two types of financial forecasting:

General Transfer Pricing Information

When one part of a multinational organization in one country sells goods or services to another part in another country, the price charged for these goods or services is called a 'transfer price'. Not long ago, transfer pricing was a subject for tax administrators and one or two other specialists. But recently, politicians, economists and businesspeople have been waking up to the importance of who pays tax on what in international business transactions between different arms of the same corporation. Globalization is one reason for this interest, the rise of the multinational corporation is another. Once you take on board the fact that more than 60% of world trade takes place within multinational enterprises, the importance of transfer pricing becomes clear.

Transfer pricing is a great way to move goods from one company division or department to another without generating a lot of postings on the Accounts Receivable and Accounts Payable books. The value of the goods is simply moved from one division to the other, a process that greatly simplifies the process.

Want to Free Yourself Up to Focus on Your Business?

If you run your own business, accounting may not always be at the forefront of your mind but it's actually a most important area. Keeping your records up to date is a good practice and means that you won't be worried when tax season rolls around every year. However, if you're busy keeping things going from day to day, you may not find the time to stay on track and this is where bookkeeping services become incredibly useful.

Keep those records up to date

Failing to keep accurate records means you could be opening yourself up to fines and penalties as well as potential investigation by the Inland Revenue. Deciding to work alongside with an accountant who can provide such services will take a huge weight off your mind, allowing you to focus on making money rather than just trying to recall where it all came from.

IFRS Accounting for Revenue Recognition and Long Term Contracts

The general concepts and principles used for revenue recognition are similar between GAAP and IFRS. They differ in the details. GAAP provides specific guidelines for revenue recognition for many different industries whereas IFRS does not. The International Accounting Standards Board illustrates revenue as including both gains and revenues. When working under GAAP, revenues and gains have completely separate definitions.

Generally, the International Financial Reporting Standards principal for revenue recognition is based primarily on the probability that the economically achievable benefits associated with the transaction will flow through to the company that is selling the goods etc. The costs and revenues must be capable of being reliably measured. The concepts used by GAAP such as realized, realizable, and earned are a basis for revenue recognition.

Transitioning to IFRS: Can It Be Done?

As a global economy becomes reality, implementing International Financial Reporting Standards (IFRS) seems more than a logical move. How could a one-world system be anything but beneficial? On the other hand, is it even a viable option for those countries that lag behind the rest of the world? What are the challenges of transitioning current market accountability to the IFRS? Although it has been a much discussed topic in recent years, uniformity in global markets is complex in nature, even though it may very well be a necessity. There are key components that need to be considered before the process is completed.

Cultural diversity in society is an attribute, but when it comes to assimilating accounting standards worldwide, it creates monumental challenges. The application of reporting transactions from one jurisdiction to another can breed inconsistency. For example, revenue recognition-a real estate property can reflect two very different results. In addition, institutional or legal obstacles can impact loan covenants-specifically, debt versus equity classifications.

What Are the Roles of Bookkeeping in a Business?

Bookkeeping is mistakenly considered to be the same thing with accounting. This confusion is quite understandable as the accounting process includes the bookkeeping function, but is just one part of the accounting process.

Bookkeeping, commonly referred to as keeping the books, is actually the day to day process of keeping full, accurate, up-to-date business records of the financial transactions of a company. These transactions include sales, purchases, income, receipts and payments by an individual or organization. And the value of these transactions is expressed in certain currency, defined by laws of particular country. Bookkeeping is usually performed by a bookkeeper.

In small to medium sized enterprises (SMEs), a bookkeeper may be the only sole financial member of staff.

Financial Records That Limited Liability Companies Must Maintain in Florida

According to Florida statutes, a LLC is a kind of business entity which is carrying a character of both a corporation as well as of sole proprietorship. As per chapter 608 of Florida statutes, there are certain laws with respect to a Limited Liability Company that makes it mandatory for them to maintain certain financial records as follows.

Department Of State Filing: All Florida LLCs are required to maintain a copy of filings that they do with Florida Department of State. This may include articles of organization, certificates regarding conversions, power of attorney and all other documents that a LLC has filed with the Department Of State. The LLC should also maintain an annual report which is to be submitted yearly to the Department Of State. This annual report should contain the formal name and address of the LLC, date of formation, and date of getting business licence. Full address of registered business and name of registered agent must be mentioned in the annual report.

IFRS Vs GAAP Accounting Standards

There has been a growing demand over the past twenty years to unite the business world under one conceptual framework for reporting financial statements. Currently, there are two types of frameworks used throughout the accounting world. They are the General Accepted Accounting Principles ( GAAP) and International Financial Reporting Standards (IFRS).

Presently more than seven thousand companies within one hundred countries worldwide use IFRS instead of GAAP. In order to harmonize these foreign capital markets, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) have been working together to converge GAAP with IFRS. The main purpose of this conversion is to have one general global financial reporting standard that allows financial statements to become more relevant and reliable. This would also allow for both United States and foreign companies to become more consistent and comparable within their financial statements. The overall objective of this conversion is to provide better financial information for capital providers, lenders, and stockholders.

Balance Sheet - Accounting for Fixed Assets - Depreciation

The concept of depreciation of fixed assets is a fairly simple one for suitably accountants, booker keepers, finance directors and accounting students but often remains a mystery for non finance people. Moreover, because more and more businesses rely on accounting software which automates many transactions, including depreciation, even some finance people may not be fully aware of the exact bookkeeping entries involved.

Most assets in a business depreciate or reduce in value over time, through consumption or simple market value. Accounting practice seeks to recognize this and to decrease their value on the balance sheet over an estimated period of time equivalent to the useful life of the asset and at the same recognize the consumption of that asset by creating an expense in the profit and loss account during each accounting period during the life of the asset as the contra entry. As the fixed asset value is decreased so also the expense account is increased.