Background
We performed an annual financial statement review and preparation of partnership tax returns for the company and its ten plus subsidiaries. The client has had turnover in its accounting department; in addition, the employees on staff were inexperienced in GAAP accounting.
Challenge
The client would consistently have significant real estate transactions requiring a fairly high level of technical expertise and significant time to prepare the accounting. The transactions ranged from acquisitions of existing operating real estate projects, sales of partial interests with varying sale dates, project rehabilitation and master lease arrangements. The client was short-staffed, didn’t have the required bandwidth to prepare the accounting related to these transactions, and their staff also lacked the technical expertise to account for their transactions under GAAP.
Solution
Perkins real estate team was able to provide support to the client, including sharing technical expertise and resources. The first issue we tackled with the client was an all-hands meeting to determine a complete listing of transactions; then we established how much capacity their staff had to work on the transactions and finally a delegation of the transactions based on level of complexity and time involved.
Several of the more complicated transactions were sent to us for preparation of the initial accounting and the client-prepared initial accounting was sent to us for review to ensure it was in compliance with GAAP. The second issue related to the client’s turnover and relative inexperience with GAAP.
Perkins regularly does training for its niche team members on various accounting and tax topics. These trainings are available to our clients’ staff to attend. Some past trainings with client attendance include: understanding and recording closing statements for real estate acquisitions and dispositions; lease accounting for GAAP and tax; and accounting for real estate transactions.