Virtas Partners was engaged by a records retention and destruction company to provide a Cash to GAAP conversion for 10 legal entities.
Client Need
Our Privately-Held client needed assistance converting their books and records from cash basis accounting to Generally Accepted Accounting Principles (GAAP). The company was under LOI to be acquired by a Private Equity firm, but the books and records were not in accordance with GAAP and the buyer could not complete financial due diligence. The company did not have adequate people, process, or technology to convert to GAAP without significant data analytics and technical competency to reconstruct historical records on a GAAP basis.. The lookback period for this engagement was initially 27 months; Upon completion, we were asked to roll-forward our findings through the next quarter, which was 3 additional months.
Tailored Solutions
- Performed a proof of cash for 11 bank accounts, ensuring all cash activity was recorded properly for all entities
- Performed a proof of payroll which focused on validating all associated costs were allocated to each entity properly
- Created amortization and depreciation schedules for approximately 50 assets which had not been previously recorded
- Identified associated liabilities for various loan agreements and created short-term and long-term liability accounts
- Assistance with the adoption of new lease accounting standard (ASC 842)
- Analyzed credit card activity to ensure purchase and payment activity was recorded timely
- Prepared journal entry recommendations to record all activity not recorded in the general ledger
Value to client
- Rapid deployment of team to develop work plan and begin work on time-sensitive engagement
- Deployed data analytical tools to identify departures from GAAP and develop correcting adjustments
- Updated trial balances with appropriate adjustments required for financial due diligence process to kick off
- Supported CFO through importing updated financial information to new ERP software instance
Capabilities
- Controller support
- Financial Analysis and Data Analytics
- GAAP Conversion
- Quality of Earnings preparation
- Generally Accepted Accounting Principles
- Financial Reporting