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Financial statements included in written business valuations frequently contain departures from generally accepted accounting principles (GAAP) or an other comprehensive basis of accounting (OCBOA) because the purpose of such financial statements is solely to assist in developing and presenting the business valuation of an entity. This Statement is being issued to exempt financial statements included in written business valuations from the applicability of Statement on Standards for Accounting and Review Services (SSARS) 1, Compilation and Review of Financial Statements (AICPA, Professional Standards, vol. 2, AR sec. 100), because users of these statements do not require that the statements be in conformity with GAAP or an OCBOA. This proposed Statement: 1. Exempts historical financial statements and normalized financial statements included in written business valuations from the applicability of SSARS 1. 2. Defines normalized financial statements as financial statements that contain necessary and appropriate adjustments in order to make an entity's financial information more meaningful when presenting and comparing on a consistent basis the financial results of that entity to those of a comparable entity as part of a business valuation engagement.
Financial statements -- Standards -- United States; Business enterprises -- Valuation -- United States
Accounting | Taxation
American Institute of Certified Public Accountants. Accounting and Review Services Committee, "Proposed statement on standards for accounting and review services : financial statements included in written business valuations ;Financial statements included in written business valuations" (1999). Statements of Position. 655.