Accounting and financial reporting considerations
- Reassess materiality, and plan for any changes. When you go public, the users of your financial statements change. The SEC has additional guidance on evaluating misstatements, which means some items previously deemed not material might need to be reconsidered.
- Review public company adoption dates for new standards and determine a plan to meet those dates.
- Identify any PCC alternatives and re-record under GAAP applicable to public companies.
- Evaluate any additional required GAAP changes for public companies.
- Determine if your financial reporting conforms to SEC requirements, including:
- An audit must be performed by a firm registered with the Public Company Accounting Oversight Board (PCAOB).
- The initial registration statement of a domestic emerging growth company (EGC) must include a minimum of two years of financial statements audited under PCAOB standards.
- Domestic companies that are not either an EGC or a smaller reporting company must include three years of financial statements audited under PCAOB standards.
- Financial statements for interim periods also might be required, depending on the timing of the registration statement.
- The form and content of financial statements must follow Regulation S-X.
- Financial statements and pro forma financial information for significant acquisitions must be included.
It’s easy to get overwhelmed in the early stages of an IPO, but following this IPO checklist can help you set up your business for success.
