Financial Statements according to GAAP

"Don Guy" wrote

It appears you are posting through a Canadian ISP. What returns in Canada need to have GAAP financials attached?

You can Google search GAAP, but the reality is, you're probably not able to prepare them yourself from some "light reading" of the accounting rules.

You have more important things to do, like run your business, and your time might be better spent servicing your customers than learning GAAP from scratch.

The province of Ontario's annual tax return apparently requires them.

I have the luxury (?) of another four months before the return must be filed. If I can can gain enough knowledge before then...

-d.

Don, that's not true. "Full" GAAP would include various disclosures by way of "notes" - such as significant accounting policies used, related party transactions, minimum annual obligations under long-term commitments, contingent liabilities - as well as a statement of cash flows, and other requirements, NONE of which are required by either Ontario or CRA.

As Paul said, you would be wasting your valuable time attempting to learn GAAP - when it's NOT required!

And what makes you think you could learn in 4 months in your spare time what professional accountants take several years in university and more years in a professional apprenticeship to learn?

Do yourself a big favour. Find a competent professional accountant to prepare your tax returns this year. Then if you INSIST on doing it yourself next year, you will have an example to follow.

them.

The question I would be asking before heading down the wrong trail very far, is Canadian GAAP identical to US GAAP???

Apparently there is, to some degree

Ahhh, but I don't want to learn "full" GAAP. The research I have done so far has told me one thing, very clearly: GAAP is a huge, hulking beast which I have neither hope nor interest in digesting. What I am looking for however, is a kick in the direction which will allow me to prepare these "financial statements" to the level required for the Ontario MOF.

Certainly an option, but I consider it to be a last resort.

No offense to those who have chosen accounting professions, but I prefer to be self-sufficient. If I was happy allowing someone else to do the number crunching for me, I'd still be an employee instead of an employer.

-d.

Oh, don't worry. if you compute your taxes wrong, the tax authority is more than happy to fix all your errors and recompute your tax for you. they provide this service for free, so why pay somebody to prepare it for you?

"Don Guy" wrote

On a related note, check to see if "self-prepared" financials can be submitted. There are some regulatory agencies that want "CPA Prepared" financials to be submitted for the license, bond, contract, etc and so on. It may be more cost efficient to get someone to do a year-end report for you that you can use to submit to anyone else that needs it throughout the year.

If you are allowed to submit "self-prepared" financials, then make the best of it.

Do you also do your own auto service? Dental work? Have you needed surgery yet? You have employees - do you delegate work to them, or do you just pay them to watch you do everything? If you delegate suitable tasks to your employees, why not delegate suitable tasks to an accountant?

You began by saying you MUST prepare GAAP financial statements for your Ontario tax returns. You now agree that's not correct, you just want to learn enough 'to allow you to prepare these "financial statements"' (your quotes).

I did imply in my earlier response that you could learn GAAP the same way that Paul Thomas and I did - a university degree and a professional apprenticeship. You say that's NOT what you want after all, but it's only becoming less clear what you really do want. Do you know double-entry bookkeeping, balance sheet, income statement? If so, what else do you think you need? If not, Google (r) for tutorials on basic bookkeeping and/or visit your public library and bookstores for books.

employer.

transactions,

university

Don: Ahhh, but I don't want to learn "full" GAAP. The research I have done

!-! > Do yourself a big favour. Find a competent professional accountant to

Don: Certainly an option, but I consider it to be a last resort.

Hmm, that shows how much you know about taxation/accounting.

Do yourself a BIG favor and get a knowledgeable Accountant to prepare your GAAP tax return. I own and operate a small Incorporated company and I keep my own bookkeeping records. When it comes Income Tax time for the business, I take a Trial Balance report to an Accountant who lives a few blocks away and works out of his home. On a nice day, I walk there for the exercise and enjoyment of a walk in the sunshine. He does the Corporate Income Tax Return for me and asks me a few questions about things he sees or doesn't see in my Trial Balance figures that he thinks might be missing and then away he goes. He has my Corporate Tax Return done in a couple of days and charges me $200.00. This is money well spent in my opinion as it means I don't have to get involved with GAAP and other CRAP that I have no interest in and would only use once a year, so would have to re-learn it all again next year.

Do yourself a good turn and find an Accountant in your neighborhood who charges reasonable rates. Hint - you DON'T want an Accountant who has a fancy office on Main Street - find one who works from their home and charges less. Your local neighborhood newspaper will probably contain ads from a few of them looking for new clients.

Best of luck!

Well, they may or may not recompute the tax, and if they do they'll charge a fee for the service. And there could be lawyers involved. But other than that he's basically right.

No, he isn't right.

While they will fix errors, they won't include the deductions one is able to claim but didn't.

CRA certainly WILL recalculate the tax if you are "wrong", but they will do so on the basis of the information you provide and any other relevant information they may have from other sources. If you give them incorrect or incomplete information, they will not fix that.

And they will not "charge a fee for the service" - what nonsense!

There "could be lawyers involved" only if the taxpayer decides to engage them. Seems unlikely, as this taxpayer doesn't want to pay a bookkeeper or accountant (don't know about an auto mechanic or dentist - I asked, but he hasn't replied yet).

"Gregory L. Hansen" wrote ...

authority is

prepare it

That's what you get when you let someone else do it. I wouldn't think that failing to include deductions is an error, really. It might cost you more than it would have otherwise, but as long as it passes the audit it can be called error-free. You could deliberately fail to include deductions and the IRS wouldn't call you on it.

Nice spin, wrong direction however.

Whether or not I "pay somebody" has nothing to do with it. Being able to manage my business's finances at a basic level, while only relying upon third parties for the dirty work, has everything to do with it.

-d.

Yes, no, and no.

I learn about activities/skills which interest me, and attempt to apply them to my benefit. I don't find the finer points of tooth decay and the inner workings of human bodies sufficiently interesting to delve in to them, and obtain those services from others as needed. On the other hand, I do find automotive maintenance and the management of my own finances to be interesting.

Because in this case, I am interested in learning some of the ins and outs of the process, rather than spending a year collecting paper, dropping it upon someone else's desk, and having them tell me where the bottom line is.

I admit that I initially thought that I needed to learn GAAP in order to get this done. As the learning process continues however, it now appears that what I need is merely to be able to prepare a set of financial statements which are suitable for inclusion with Ontario's annual corporate tax return. I thought I had made that clear the post to which you're referring.

I am familiar with balance sheets and income statements at a basic level; not even slightly familiar with double-entry bookkeeping.

Thanks, but I started down that road before tuning in to this newsgroup. I do not believe that there is any such thing as a single, perfectly complete information source. This newsgroup is just one of many.

-d.

As someone in business, you'd be wise to know at more than just the end of the year how the business is doing financially... you can spot a trend early on and perhaps be able to do something about it before it becomes a major issue.

The bottom line is that the numbers tell the story of your business and unless you have a good handle on them you really are flying along by the seat of your pants.

If you are doing the bookkeeping during the year, you should be familiar with GAAP. It is all common sense that you could have written down on a couple of sheet of paper in your office.

why wouldn't they? are they dishonest?

you sound like an accountant who is worried that the new trend is to not use tax accoutants anymore. I just plug it all into my turbo tax.