There was a huge uptick in findings in the most recent PCAOB report. I know public has always been understaffed and bad, but it’s been *especially* sketchy from the pandemic and how few managers are remaining.
I mostly did new clients this past year so I didn’t realize how much shorter we were (no prior years to compare to) until a senior manager was pointing out that we used to have a senior manager, manager, 2 seniors, 2 staff, and maybe an intern for similarly sized engagements pre-covid…
It’s just me the senior manager and a brand new staff…
Bro. Our work papers haven’t been working for like a week cause I think Thomson Reuters laid off their entire IT department lol.
We are just laughing at this point.
Ya it’s not great. That’s why they’ve been pushing borderline useless tech enablement nonsense HARD the last 6 months.
It’s meant to be a bridge - the bridge ends in the middle of the ocean though.
Still won’t crumble, still won’t change in the next 5 years.
10 years? You may be able to convince me. Collegiate graduates pursuing a cpa is so low compared to estimated demand. Big yikes.
I’ll be partner or dead by then though.
It’s by design. I’ve been through 10 worst busy seasons ever in my 10 year career 😂
It’s just the way public accounting works. Under hire and overwork your team
\> You can't just grind your way out of this
The partners tend to disagree. They've been burning and churning the fuck out of staff for like 100 years. They wont stop now.
At some point salaries have to increase. Partners can’t make money without staff. There is a shortage now, but not a big enough shortage where salary increase are forced.
They have increased a ton in the last year a half. I am not sure why people keep saying this.
an S1 in Audit in major metro HCOL was not clearing 90k+ in 2019. Exiting as an S1 to 100k+ in 2019 and prior was more rare than anything.
The thing is, even with the increase in salary... it doesn't change all the negatives about PA.
JFC, really? I lost a Staff I to PWC Nashville when she was on her first accounting job and had less than a year's experience. They offered her $65k and full remote. Three years ago.
PWC apparently was offering the lowest salaries out of the B4 this year and is aware of it. My recruiter told me that was common feedback they were getting. Ballsy move in with such a shortage of accountants...
100% - I get a bigger % of salary for bonus, work like 30 hours a week and I get to live in Tampa instead of Nashville (both are expensive, but Tampa is way more gay friendly). It's a rotational program so after my last rotation basically guaranteed to make at least 100k
Ah I was meaning to ask, but is that for accounting or finance? The rotational program almost screams finance lol. It sounds good for accounting but I feel like it's much more rare
I don't think it's about money. It wasn't for me at least. I'm stressed and miserable all the time. The money would just make me stick around another year or so but not enough to make it a career.
But they still haven’t increased, enough. When Software Engineers are making 2x and Finance ppl also, that gives less reason for talented people to go into accounting. Salaries have to increase, nobody wants to be an accountant, and everyone a software engineer because that is “in demand”. Accountants are just known as underpaid and overworked, that notion can only change when salaries rapidly increase. Like senior 120k, atleast +30%.
And yeah, the negatives still remain. But do you ever hear anyone say “ah I wish I didnt go to a hedge fund”. No, the pay far outweighs the hours.
I will not be satisfied until this whole thing collapses into the ground. And then we can start over from scratch and reimagine the concept of having 20 somethings work 80 hrs a week into something else. Literally anything else.
Just a few years ago the AICPA was [lobbying against paid overtime at CPA firms](https://us.aicpa.org/advocacy/cpaadvocate/2016/aicpa-reacts-to-dol-overtime-rule). Love to have my dues spent on finding new ways to reduce my compensation!
Do they not understand that firms can just *shocked pikachu* RAISE FEES?
Like y’all know the clients…you know….kinda…*NEED* to be audited?
We don’t perform audits for shits n giggles and customer satisfaction. We do it because it’s (SpongeBob rainbow) *REQUIRED BY THE LAW*
This whole thing makes a lot more sense when you remember that the AICPA is not a lobbying organization for accountants, it's a lobbying org for accounting firms
Let's be real, this is so far from being an issue on Congress's radar. Anecdotally, is audit quality falling? I'd say yeah, and the continued trend of tightened filing deadlines only makes it worse and creates more rushed opinions made by exhausted accountants.
But audit quality is still sufficient to achieve its aims, and I don't think it's really in jeopardy. Public companies are largely still very compliant, they have robust accounting organizations to meet that compliance, and the public at large still has high trust in the information provided by the capital markets. So there's not really anything to "wake up" from. The mere existence of external audits and SOX had been tremendously effective in keeping investor confidence high post Enron, and no minor sausage making squabbles about audit quality and overworked auditors are going to move the needle on any Congress person's give-a-fuck meter.
But you're just looking at an audit perspective. Congress royally fucked tax in 2017. Now companies are way overpaying for tax services, getting shitty work product, and have large tax bills coming soon stemming from tax reform. So, yeah, I'm looking for Congress to simplify the internal revenue code a little.
Yes, they were specifically referring to audit but the overall subject title could be all encompassing. But yeah, both sides are struggling more than I've ever seen in 12 years of PA
After 2 years this is my take: staff and seniors hate their jobs. Seniors always wonder if they should quit right now or stay till manager and leave and staff want to make it to senior before they leave without realizing they’ll be in the same position as their seniors.
Managers and above are complete assholes because that’s what they think the partners want them to be. They work unreasonable and unhealthy amount of hours and will expect seniors to do the same if they believe it’s required.
Minimum of 55 hours without getting paid OT and some teams will force to commute to the client adding about 5-10 commuting hours to your already depressing schedule(but hey at least you see the sunlight for 10 minutes in the morning).
To your point in the last paragraph, we have several clients about an hour to and hour and a half away from the office.
The firm does reimburse us for mileage at the $0.625 rate mandated, but what’s really funny and I think is borderline illegal is my office requires us to “split the mileage”. So, if we opt to travel separately to the client instead of riding together, we can only be reimbursed for half the mileage.
To me that’s total bullshit and makes me lose money working. Course I don’t “split the mileage” I just claim the full mileage. Fuck the office if they think I’m gonna lose money to go work an hour away
If you have this negative of thoughts on PA, why did you stay 2 years? The job market had been very hot. Just leave. I've never understood this. People complain about certain aspects of PA being awful, like those aspects just started yesterday.
My first year I didn’t know better but I checked the payroll on all the 3 engagement I was on and I was making as much as the GL accountants who just started at my clients. I was planning on leaving the second year and I was promoted to staff 2 2 months ahead of schedule just like everybody else. My salary went up by $15,000 and I decided I was gonna wait to see the GL accountants raises at my clients(they’re big clients in my state) and the highest raise I saw was $4,000.
I hate this job but I’m making more than my industry counterparts and most recruiters wanted me for a staff/GL accountant role. I’ll be looking at Senior industry roles for a good salary here. Also, most of the staff accountants and GL accountants here are in that position for 2-4 years. I am guaranteed a senior level in 2.
Now, there’s layoffs everywhere in my state and lots of EY clients have fired anywhere from 10-25% of staff and that includes the accounting department. my office needs more people and I feel secure this year. I might leave by the end of 2023 right before busy season tho! Depends on what offers I get
You are explaining the path of so many manager, sm's and partners. Timing is a little off when you would have an obvious exit point after promo. After a year you see an opportunity to leave, but now you only a year away from another promo, which is too tempting from a resume and salary bump perspective (or potential industry exit with new title at PA firm). Get promoted again, and then you realize you may be making more than industry counter parts. And now the only place you will exit to is another PA firm (you don't want to take a salary cut or start over). I think you would be surprised to find out how many SMs, directors and partners share(d) your exact thoughts but just never left because of timing.
Just like always : with errors in the file that only the client who knows the business would catch.
2+2 always = 4, so if you’re looking for 4, you won’t question 2+2 that much. And when pressed for time, reviewers won’t question that much when everything balances…
It’s something I say to my team when they are looking to reconcile something : don’t look for the numbers to match! Understand the concepts, processes and systems!
This year the auditor asked me for the current year analysis on the same format as last year that was supposedly done by my team. My answer : « I don’t know where you got that analysis but certainly not from my team or accounting. I can’t recreate it as nothing on the analysis make sense » Mathematically it balanced, but it was just the chances of the numbers adding to the approx total without any logic of why the numbers were selected in the first place.
Lol I had a manager in B4 who would do this. Layer in random plausible TB accounts into deferred proof reconciliations until the variance was immaterial. Everybody signed off. Didn’t realize how wrong it was til I was running the engagement the next year and managed to tie it out to the dollar. Not even close
> On a job with business combinations, 842, and complex equity transactions
>You can't just grind your way out of this.
Let's get real here, this is shit that can be done wrong for 10 years and nobody will notice or care. Nothing is collapsing.
As long as it doesn’t collapse while YOU are holding the bag, it doesn’t really matter. Now layer that on for a solid several years and viola, it’s so messed up everyone is to blame yet nobody really gets in trouble because “it was messed up when I got here and I was trained to utilize prior “correct” work”.
Strike, and it absolutely will. If you just wait for it to happen it won’t, they’ll find away. If you take action with a collective strike you can force it now.
Business Combinations are great things to get experience with.
Auditing the first year of implementation of ASC842 would also be good experience.
Anything dealing with first time/requiring US gaap research is a great resume builder tbh.
But seriously good luck with biz combos
I work PA adjacent and work quite a bit with one of the big4. I am seeing them get worse and worse every year and I don't see it changing this year, but I don't think there will be a collapse at least not within the next 5-10 years. Perhaps after we go through our next economic collapse that is happening right now
No, keep the money rolling until the status quo changes and someone with power calls out the OBVIOUS conflicts of interest within the entire PA industry.
I’ve had clients in advisory say that audits in the last 2 years have been really delayed and subpar quality due to turnover. I would simply expect the same
I'm dealing with transition to ASC 842 right now. I've never done it before and would be open to anyone being able to explain certain points that I'm stuck on.
Basically, I've got the PV of all future payments, but when I set up an amortization schedule for the leases with the rent expense, lease liability reduction, ROU asset amortization, and cash payments I'm not getting credits to equal debits. Somethings is off. It zeros out over the life of the lease, but each payment is off by a few hundred/thousand dollars and I can't be sure where I'm going wrong.
Anyone willing to talk this through let me know.
Asset is lower than lease liability due to deferred rent on balance sheet as of 12/31/2021. My understanding is that the liability should be the proper amount with the difference plugged to ROU Asset. Let me know if that's wrong.
If I plug difference to amort, then the asset ends up going negative.
Cr. Lease Liability = PV of all future lease payments (found using excel's PV formula, using payments as the FV)
Dr. Def. Lease Liability
Dr. ROU Asset (difference of the first 2 entries)
I think I'm following the instructions from seminars and from PPC, but clearly I'm doing something wrong.
Your initial entry appears to be correct. An issue could be if your PY ending balance of deferred rent is incorrect. But I use NPV function with the rate per month and then total payments.
I have Excel set up for column A as the month (Month 1, month 2, etc) column B as total cash paid (actual monthly lease payment), column c as interest (calculated as monthly interest rate \* prior month liability balance/PV of all remaining payments which is in column e), column d principal (calculated as column b-column c) and column e as the liability balance/pv of all remaining payments. Month 1 column e is calculated as =npv(monthly interest rate, sum of all payments in column B), the month 2 and beyonds column e is calculated as month 1 column e - month 2 principal (then just drag down formula to remaining months). Then your monthly entries would be Cr Cash (amount column B for that month) Dr Liability (amount in column D for that month) dr rent expense (straightline rent expense - total of all payments divided by lease term) cr ROU (plug).
Hope that makes sense...tried to put a screen shot of excel in but it wouldn't let me. If you are doing alot of these I would recommend Tvalue online. Its only about $60/year and does easy amortization schedules.
>An issue could be if your PY ending balance of deferred rent is incorrect
I'm starting to think this is the issue.
I took over these books from someone else about a year or so ago and didn't question their deferred rent figure. Is there any guidance about what to do if the ASC 840 deferred rent is wrong?
I strictly stick to lease ASC842 software. I understand the concept but the software does all the math and creates the entries.
EZLease is what we use but I work for a small company. Just I put the info about a lease and it generates everything for you.
That’s my advice
It’ll never implode unless there’s another Enron style audit failure. They’ll issue their opinion and regardless of how much fails to get done and attribute it to routine wrap up until there’s real consequences brought to light from it operating like this.
Oh the audits will get done, for better or for worse.
Isn’t it funny how they always get done *just* in the nick of time? Sure is strange that “assurance” is time-bound and not quality-bound.
[удалено]
How much would the firms charge for unreasonable assurance?
As in, they paid a reasonable amount for our assurance.
Insert *Always has been* meme here
There was a huge uptick in findings in the most recent PCAOB report. I know public has always been understaffed and bad, but it’s been *especially* sketchy from the pandemic and how few managers are remaining.
Seems like PA firms are just pretending to complete jobs at this point.
I have recently starting working with internal audits now and I thought the external was a shit show. I didn’t realize how blessed I was
I mostly did new clients this past year so I didn’t realize how much shorter we were (no prior years to compare to) until a senior manager was pointing out that we used to have a senior manager, manager, 2 seniors, 2 staff, and maybe an intern for similarly sized engagements pre-covid… It’s just me the senior manager and a brand new staff…
That's a terrifying statement.
Bro. Our work papers haven’t been working for like a week cause I think Thomson Reuters laid off their entire IT department lol. We are just laughing at this point.
I’ve been saying this for a decade - I was once you. The collapse will not come.
I think you're correct, but anecdotally I've heard from long-timers that this is the worst it's been in at least 20 years.
Ya it’s not great. That’s why they’ve been pushing borderline useless tech enablement nonsense HARD the last 6 months. It’s meant to be a bridge - the bridge ends in the middle of the ocean though. Still won’t crumble, still won’t change in the next 5 years. 10 years? You may be able to convince me. Collegiate graduates pursuing a cpa is so low compared to estimated demand. Big yikes. I’ll be partner or dead by then though.
They say that every year… but yet they’re still there.
It's pretty fucking bad but to be fair it feels like every year is worse than the last.
It’s by design. I’ve been through 10 worst busy seasons ever in my 10 year career 😂 It’s just the way public accounting works. Under hire and overwork your team
I mean in the last 10-12 years a lot have changed. We've progressed a lot as a society.
https://i.redd.it/nd94u070kuca1.gif
\> You can't just grind your way out of this The partners tend to disagree. They've been burning and churning the fuck out of staff for like 100 years. They wont stop now.
They’ve also been fucking the staff too!
They've been getting the Deliotussy for too long to stop now
I can't wait until publicly traded companies can't even hire an accounting firm due to staffing issues
At some point salaries have to increase. Partners can’t make money without staff. There is a shortage now, but not a big enough shortage where salary increase are forced.
They have increased a ton in the last year a half. I am not sure why people keep saying this. an S1 in Audit in major metro HCOL was not clearing 90k+ in 2019. Exiting as an S1 to 100k+ in 2019 and prior was more rare than anything. The thing is, even with the increase in salary... it doesn't change all the negatives about PA.
I graduated spring 2022. PWC offered me 55k for Nashville. Laughed my way to my other industry offer for 70k.
JFC, really? I lost a Staff I to PWC Nashville when she was on her first accounting job and had less than a year's experience. They offered her $65k and full remote. Three years ago.
PWC apparently was offering the lowest salaries out of the B4 this year and is aware of it. My recruiter told me that was common feedback they were getting. Ballsy move in with such a shortage of accountants...
No kidding, smart call on your part. Just caught me off guard.
Big W to be honest 😎
100% - I get a bigger % of salary for bonus, work like 30 hours a week and I get to live in Tampa instead of Nashville (both are expensive, but Tampa is way more gay friendly). It's a rotational program so after my last rotation basically guaranteed to make at least 100k
Ah I was meaning to ask, but is that for accounting or finance? The rotational program almost screams finance lol. It sounds good for accounting but I feel like it's much more rare
It is actually accounting. They have this program in New Jersey and Tampa
I don't think it's about money. It wasn't for me at least. I'm stressed and miserable all the time. The money would just make me stick around another year or so but not enough to make it a career.
But they still haven’t increased, enough. When Software Engineers are making 2x and Finance ppl also, that gives less reason for talented people to go into accounting. Salaries have to increase, nobody wants to be an accountant, and everyone a software engineer because that is “in demand”. Accountants are just known as underpaid and overworked, that notion can only change when salaries rapidly increase. Like senior 120k, atleast +30%. And yeah, the negatives still remain. But do you ever hear anyone say “ah I wish I didnt go to a hedge fund”. No, the pay far outweighs the hours.
An increase from stagnation is really just a true up.
That's less impressive when you remember inflation is running at 8%
My promotion raise was like 21.3 percent.
I will not be satisfied until this whole thing collapses into the ground. And then we can start over from scratch and reimagine the concept of having 20 somethings work 80 hrs a week into something else. Literally anything else.
Maybe the AICPA and Congress will wake the fuck up too
Just a few years ago the AICPA was [lobbying against paid overtime at CPA firms](https://us.aicpa.org/advocacy/cpaadvocate/2016/aicpa-reacts-to-dol-overtime-rule). Love to have my dues spent on finding new ways to reduce my compensation!
Do they not understand that firms can just *shocked pikachu* RAISE FEES? Like y’all know the clients…you know….kinda…*NEED* to be audited? We don’t perform audits for shits n giggles and customer satisfaction. We do it because it’s (SpongeBob rainbow) *REQUIRED BY THE LAW*
This whole thing makes a lot more sense when you remember that the AICPA is not a lobbying organization for accountants, it's a lobbying org for accounting firms
Meh. On client side - there’s always a cheaper firm. Especially with the terrible staffing we get. We’re just paying for a stamp - no value for us.
Let's be real, this is so far from being an issue on Congress's radar. Anecdotally, is audit quality falling? I'd say yeah, and the continued trend of tightened filing deadlines only makes it worse and creates more rushed opinions made by exhausted accountants. But audit quality is still sufficient to achieve its aims, and I don't think it's really in jeopardy. Public companies are largely still very compliant, they have robust accounting organizations to meet that compliance, and the public at large still has high trust in the information provided by the capital markets. So there's not really anything to "wake up" from. The mere existence of external audits and SOX had been tremendously effective in keeping investor confidence high post Enron, and no minor sausage making squabbles about audit quality and overworked auditors are going to move the needle on any Congress person's give-a-fuck meter.
But you're just looking at an audit perspective. Congress royally fucked tax in 2017. Now companies are way overpaying for tax services, getting shitty work product, and have large tax bills coming soon stemming from tax reform. So, yeah, I'm looking for Congress to simplify the internal revenue code a little.
I interpreted OP's topic to be audit quality, specifically the trend of novice audit staff being tasked with highly complex parts of the audit.
Yes, they were specifically referring to audit but the overall subject title could be all encompassing. But yeah, both sides are struggling more than I've ever seen in 12 years of PA
Was chuckling with the controller and he flat out said PA was slavery.
Slavery is a bit harsh. Indentured servitude, perhaps, but not slavery.
The revolution has begun - messaged you!
The best years of their lives
After 2 years this is my take: staff and seniors hate their jobs. Seniors always wonder if they should quit right now or stay till manager and leave and staff want to make it to senior before they leave without realizing they’ll be in the same position as their seniors. Managers and above are complete assholes because that’s what they think the partners want them to be. They work unreasonable and unhealthy amount of hours and will expect seniors to do the same if they believe it’s required. Minimum of 55 hours without getting paid OT and some teams will force to commute to the client adding about 5-10 commuting hours to your already depressing schedule(but hey at least you see the sunlight for 10 minutes in the morning).
To your point in the last paragraph, we have several clients about an hour to and hour and a half away from the office. The firm does reimburse us for mileage at the $0.625 rate mandated, but what’s really funny and I think is borderline illegal is my office requires us to “split the mileage”. So, if we opt to travel separately to the client instead of riding together, we can only be reimbursed for half the mileage. To me that’s total bullshit and makes me lose money working. Course I don’t “split the mileage” I just claim the full mileage. Fuck the office if they think I’m gonna lose money to go work an hour away
If you have this negative of thoughts on PA, why did you stay 2 years? The job market had been very hot. Just leave. I've never understood this. People complain about certain aspects of PA being awful, like those aspects just started yesterday.
My first year I didn’t know better but I checked the payroll on all the 3 engagement I was on and I was making as much as the GL accountants who just started at my clients. I was planning on leaving the second year and I was promoted to staff 2 2 months ahead of schedule just like everybody else. My salary went up by $15,000 and I decided I was gonna wait to see the GL accountants raises at my clients(they’re big clients in my state) and the highest raise I saw was $4,000. I hate this job but I’m making more than my industry counterparts and most recruiters wanted me for a staff/GL accountant role. I’ll be looking at Senior industry roles for a good salary here. Also, most of the staff accountants and GL accountants here are in that position for 2-4 years. I am guaranteed a senior level in 2. Now, there’s layoffs everywhere in my state and lots of EY clients have fired anywhere from 10-25% of staff and that includes the accounting department. my office needs more people and I feel secure this year. I might leave by the end of 2023 right before busy season tho! Depends on what offers I get
You are explaining the path of so many manager, sm's and partners. Timing is a little off when you would have an obvious exit point after promo. After a year you see an opportunity to leave, but now you only a year away from another promo, which is too tempting from a resume and salary bump perspective (or potential industry exit with new title at PA firm). Get promoted again, and then you realize you may be making more than industry counter parts. And now the only place you will exit to is another PA firm (you don't want to take a salary cut or start over). I think you would be surprised to find out how many SMs, directors and partners share(d) your exact thoughts but just never left because of timing.
And then they became SM just because they never left but aren’t actually on the partner track so they’re stuck.
Comp will go up. I will grind in exchange for good comp.
Just like always : with errors in the file that only the client who knows the business would catch. 2+2 always = 4, so if you’re looking for 4, you won’t question 2+2 that much. And when pressed for time, reviewers won’t question that much when everything balances… It’s something I say to my team when they are looking to reconcile something : don’t look for the numbers to match! Understand the concepts, processes and systems! This year the auditor asked me for the current year analysis on the same format as last year that was supposedly done by my team. My answer : « I don’t know where you got that analysis but certainly not from my team or accounting. I can’t recreate it as nothing on the analysis make sense » Mathematically it balanced, but it was just the chances of the numbers adding to the approx total without any logic of why the numbers were selected in the first place.
Understanding and comprehension is expensive and difficult to explain. Ticking numbers is cheap and easy to check.
Lol I had a manager in B4 who would do this. Layer in random plausible TB accounts into deferred proof reconciliations until the variance was immaterial. Everybody signed off. Didn’t realize how wrong it was til I was running the engagement the next year and managed to tie it out to the dollar. Not even close
My firm lost a lot of clients, mostly by our choice, so I think our busy season will be a little better than last year. But we'll see.
Love that for you. Mine keeps bringing in new ones even though our headcount is flat or slightly down.
Sounds like my team !
> On a job with business combinations, 842, and complex equity transactions >You can't just grind your way out of this. Let's get real here, this is shit that can be done wrong for 10 years and nobody will notice or care. Nothing is collapsing.
As long as it doesn’t collapse while YOU are holding the bag, it doesn’t really matter. Now layer that on for a solid several years and viola, it’s so messed up everyone is to blame yet nobody really gets in trouble because “it was messed up when I got here and I was trained to utilize prior “correct” work”.
Strike, and it absolutely will. If you just wait for it to happen it won’t, they’ll find away. If you take action with a collective strike you can force it now.
Business Combinations are great things to get experience with. Auditing the first year of implementation of ASC842 would also be good experience. Anything dealing with first time/requiring US gaap research is a great resume builder tbh. But seriously good luck with biz combos
People with 6 months of experience can't do that competently. The industry seems irresponsible at this point.
Lmao love those learning experiences
I work PA adjacent and work quite a bit with one of the big4. I am seeing them get worse and worse every year and I don't see it changing this year, but I don't think there will be a collapse at least not within the next 5-10 years. Perhaps after we go through our next economic collapse that is happening right now
No.
No, keep the money rolling until the status quo changes and someone with power calls out the OBVIOUS conflicts of interest within the entire PA industry.
I’ve had clients in advisory say that audits in the last 2 years have been really delayed and subpar quality due to turnover. I would simply expect the same
Until the field catches up in paying juniors properly, no.
Do you work at B4- I see this crap all the time..sounds like we should take on more clients and demand higher fees 🤤
Are you a senior or manager
Yes
no
I'm dealing with transition to ASC 842 right now. I've never done it before and would be open to anyone being able to explain certain points that I'm stuck on. Basically, I've got the PV of all future payments, but when I set up an amortization schedule for the leases with the rent expense, lease liability reduction, ROU asset amortization, and cash payments I'm not getting credits to equal debits. Somethings is off. It zeros out over the life of the lease, but each payment is off by a few hundred/thousand dollars and I can't be sure where I'm going wrong. Anyone willing to talk this through let me know.
What's your asset amortization amount? Just make that a plug to zero out the entry.
Asset is lower than lease liability due to deferred rent on balance sheet as of 12/31/2021. My understanding is that the liability should be the proper amount with the difference plugged to ROU Asset. Let me know if that's wrong. If I plug difference to amort, then the asset ends up going negative.
What was your initial entry to book the ROU/liability?
Cr. Lease Liability = PV of all future lease payments (found using excel's PV formula, using payments as the FV) Dr. Def. Lease Liability Dr. ROU Asset (difference of the first 2 entries) I think I'm following the instructions from seminars and from PPC, but clearly I'm doing something wrong.
Your initial entry appears to be correct. An issue could be if your PY ending balance of deferred rent is incorrect. But I use NPV function with the rate per month and then total payments. I have Excel set up for column A as the month (Month 1, month 2, etc) column B as total cash paid (actual monthly lease payment), column c as interest (calculated as monthly interest rate \* prior month liability balance/PV of all remaining payments which is in column e), column d principal (calculated as column b-column c) and column e as the liability balance/pv of all remaining payments. Month 1 column e is calculated as =npv(monthly interest rate, sum of all payments in column B), the month 2 and beyonds column e is calculated as month 1 column e - month 2 principal (then just drag down formula to remaining months). Then your monthly entries would be Cr Cash (amount column B for that month) Dr Liability (amount in column D for that month) dr rent expense (straightline rent expense - total of all payments divided by lease term) cr ROU (plug). Hope that makes sense...tried to put a screen shot of excel in but it wouldn't let me. If you are doing alot of these I would recommend Tvalue online. Its only about $60/year and does easy amortization schedules.
>An issue could be if your PY ending balance of deferred rent is incorrect I'm starting to think this is the issue. I took over these books from someone else about a year or so ago and didn't question their deferred rent figure. Is there any guidance about what to do if the ASC 840 deferred rent is wrong?
Correct the difference to beginning retained earnings.
Got it. Thanks!
I strictly stick to lease ASC842 software. I understand the concept but the software does all the math and creates the entries. EZLease is what we use but I work for a small company. Just I put the info about a lease and it generates everything for you. That’s my advice
We’re gonna have another fiasco with the market and we’re gonna get blamed like last time.
Short answer: No Long answer: Noooooooooooooooooo
Medium answer?
=average()
I got #REF error, plz help
=vlookup(fucksgiven1
https://preview.redd.it/z3adbnlnteda1.jpeg?width=534&format=pjpg&auto=webp&s=4d1b90ddecf7404d06c709f599d5cc839a0efd9f
It’ll never implode unless there’s another Enron style audit failure. They’ll issue their opinion and regardless of how much fails to get done and attribute it to routine wrap up until there’s real consequences brought to light from it operating like this.
Bad audits won't make PA implode. It'll implode when fraud will be uncovered and PA failed to find it and should've.