Private Company GAAP Alternatives: The PCC Elections That Let Small Businesses Skip Big-Company Accounting
Private companies can amortize goodwill over 10 years, skip VIE consolidation, and simplify swap accounting — all inside GAAP.
#financial-statements
Financial Statements
Understand and prepare balance sheets, income statements, and cash flow reports
Regulation A+ Tier 1 vs Tier 2: Raise Up to $20 Million or $75 Million From the Public Without a Full IPO
Tier 1 caps raises at $20M with state review and no audit; Tier 2 reaches $75M with preempted blue-sky laws, audited financials, and ongoing reports.
Single-Entry vs. Double-Entry: What Changes When Your Business Outgrows a Checkbook Ledger
Single-entry tracks cash; double-entry tracks your whole business. Each transaction hits two accounts, keeping Assets = Liabilities + Equity balanced.
Tax-Basis Financial Statements, Explained: The Cheaper OCBOA Alternative to GAAP, What Your Lender Gives Up, and When a Compilation Is Enough
Tax-basis statements measure your books by IRS rules, not GAAP — 20 to 30 percent cheaper, but lenders lose comparability and deferred-tax visibility.
Cost of Goods Sold Explained: What Belongs in COGS, How Inventory Decides Your Gross Profit, and Why Misclassified Labor Lies About Your Margin
COGS is beginning inventory plus purchases and direct labor minus ending inventory — under IRS rules a $5,000 miscount moves gross profit $5,000.
FIFO vs. LIFO: How Your Inventory Method Changes Your Tax Bill When Prices Rise
LIFO matches newest costs against sales, cutting taxable income while prices rise — but the IRS locks in the election and taxes the reserve when you leave.
Net Profit Margin vs. Gross Margin vs. Operating Margin: The Three Profitability Ratios Every Small Business Owner Should Track
Gross margin tests your pricing, operating margin tests your overhead, net margin tests the bottom line — track all three monthly to find the leak.
Held for Sale vs. Discontinued Operations: How to Classify a Divested Unit (and Stop Depreciating the Right Assets)
Held for sale freezes depreciation once all six criteria are met; discontinued operations further requires a disposed component that is a strategic shift.
Negative Retained Earnings, Explained: What an Accumulated Deficit Really Means and How to Fix It
Negative retained earnings — an accumulated deficit — means lifetime losses and payouts exceed profits; only future earnings reverse it.
Chart of Accounts Template: The Five Account Types Every Small Business Needs From Day One
Every transaction lands in one of five account types: assets, liabilities, equity, revenue, expenses. Copy this starter template and tailor it to your business.
Due Diligence Checklist for Buying an Existing Business: Quality of Earnings, Working Capital, and SBA 7(a) Requirements
SBA 7(a) acquisition loans now need 1.25x coverage and a QoE above $3M — verify earnings, peg working capital, and diligence tax before you close.
Freight-In vs. Freight-Out: Why Inbound Shipping Belongs in COGS and Outbound Shipping Is an Operating Expense
Freight-in is part of inventory cost and becomes COGS when goods sell; freight-out is a selling expense. Mixing them distorts gross margin and tax.