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The Economic Benefits of Adopting US GAAP

Post author By admin
Post date July 6, 2023

The Economic Benefits of Adopting US GAAP

The US Generally Accepted Accounting Principles (GAAP) is one of the most popular accounting standards used not only in the USA but around the world.

It is a comprehensive system of accounting methods, rules, requirements, and practices that accounting firms can adopt to standardize their accounting procedures.

Adopting US GAAP offers numerous advantages as it ensures consistency in financial reporting, enhances global competitiveness, and promotes greater transparency in financial disclosures.

So, if you are still wondering whether adopting US GAAP can bring any actual benefits, this is the perfect guide for you.

Benefits of Adopting US GAAP

1. Facilitates Long-Term Planning

Planning is key to running a successful business. Apart from creating a comprehensive future business plan, it is important to have key financial planning and expansion strategies to handle such procedures.

Adopting US GAAP allows you to have a clear and accurate picture of your business transactions and overall revenue so you can easily predict cash inflows and outflows.

Having a comprehensive record of the financial health of the business is important for optimum financial efficiency, and it becomes possible with GAAP.

2. Ensures Consistency

The level of consistency and standardization provided by GAAP cannot be achieved through customized internal accounting standards. GAAP ensures that the same set of rules is followed consistently across all reporting periods, maximizing the consistency of financial reports.

Ultimately, consistent financial reporting plays a vital role in facilitating effective communication between businesses and their stakeholders, investors, and other parties, enabling them to evaluate and comprehend financial data with ease.

3. Wins Stakeholder’s Trust

If you want to impress the company’s stakeholders and investors, you should present your financial information in compliance with GAAP. This will also ensure that potential international investors can easily understand the accounting procedures and financial reports of your business.

Complying with GAAP guidelines assures stakeholders of your adherence to international standards, enhancing transparency, credibility, and confidence in your financial information.

4. Comparable Financial Reports

It is common for investors to compare the financial reports of different organizations, especially when they are finding a suitable company to invest in or to measure the financial health of their portfolio.

When you adopt GAAP in your business, you’ll be following standardized guidelines related to accounting, auditing, and financial reporting. As a result, it becomes easier for investors to compare the reports of different companies following US GAAP.

For instance, consider a scenario where a company not following GAAP generates a higher profit compared to another company with lower profit. Due to differences in revenue recognition, these two companies cannot be accurately compared.

The lack of standardization makes it challenging to assess businesses effectively. This is why experts, such as professional accounting services in Malaysia, assist businesses in adopting US GAAP, promoting standardization for reliable comparisons.

5. Minimize Frauds

US GAAP plays an integral role in minimizing the risks and fraud associated with typical accounting standards. It minimizes the risk of data misrepresentation and other types of financial fraud.

Moreover, as per US GAAP guidelines, investors and stakeholders have the power to hold business owners accountable for inconsistencies in financial reporting.

Professional accountants use GAAP to make sure there are no gaps in financial reports and that any mistakes are rectified quickly so that businesses can operate efficiently.

Standardization is also the key to complete legal compliance, as GAAP principles have been carefully designed to ensure maximum compliance with the law.

By adopting GAAP, you can avoid legal penalties and fines as you will have all the required information and financial documents to show to the authorities for auditing and taxation purposes.

6. Find Room for Improvement

There is always room for improvement in businesses in terms of financial growth and overall performance.

Adopting US GAAP is a great way of comparing a company’s performance with the key competitors in the market so that strategic business decisions can be taken according to the right business model.

When you use reliable accounting services in Malaysia to prepare thorough financial reports as per GAAP guidelines, you can expect to receive comprehensive recommendations about the changes required to improve your business.

Ultimately, following the expert’s advice will help you grow your business.

In a Nutshell

Considering all of these aspects and benefits, there is no doubt that US GAAP can provide numerous economic advantages to your business.

It guarantees consistency in financial reporting and accounting standards, allowing businesses to make a favorable impression on investors and effectively communicate with stakeholders, thereby fostering satisfaction and trust.

By adhering to GAAP, businesses can enhance their financial transparency, credibility, and overall performance, leading to increased opportunities for growth and success.

Tags us gaap

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The Benefits of Outsourcing Your Accounting to a Professional

Post author By admin
Post date July 6, 2023

The Benefits of Outsourcing Your Accounting to a Professional

A robust and dependable accounting system is crucial for the success and expansion of any business. Professional accountants play a vital role in effectively handling various accounting tasks and financial reporting.

However, it can be challenging for many businesses to maintain and manage an in-house team of accountants. In such cases, outsourcing accounting procedures to an established accounting firm in Malaysia becomes a practical solution.

By entrusting your financial management to experts, you can ensure that your finances are in capable hands, allowing you to focus on other core aspects of your business.

Let’s explore the benefits of outsourcing your accounting in detail.

What is Outsourced Accounting?

Outsourcing accounting means hiring a third-party source, such as an accounting firm or accounting services in Malaysia, to handle your accounting functions in exchange for a specific price.

In this way, professional accountants take care of your complete accounting requirements, including transaction recording, bookkeeping, payroll management, financial reporting, planning, and tax filing.

An outsourced accounting team handles critical parts of the business, so they are typically considered part of the company and not traditional service providers.

Benefits of Outsourced Accounting Services

1. Save Money

Many businesses assume that outsourcing accounting will put an additional burden on their finances. However, the truth is the opposite.

Companies can actually save a significant amount of money by outsourcing their accounting functions to a professional accounting firm. It helps them get quality services at an affordable rate.

Businesses don’t have to worry about hiring and managing an in-house team of accountants by outsourcing accounting services. Moreover, you only have to pay for what you need. It minimizes the loss in productivity costs that come with hiring full-time employees.

2. Get Expertise

Outsourcing the accounting and financial management of your company is also useful because you get access to experienced and highly qualified professionals who have expertise in this area.

Accounting firms in Malaysia have trained accountants and finance professionals to handle different aspects of accounting functions.

Moreover, they work with a sharp focus on accounting processes and not any other aspect of the business. Hence, you can expect maximum quality from them.

3. Avoid Turnover Issues

High employee turnover is a common issue that many organizations have to face in different departments. If you hire in-house accountants, there is a high chance that you’ll face a similar issue.

It becomes even more prominent in small businesses, in which every team member is integral to the smooth functioning of the business. You can easily avoid this problem by outsourcing your accounting functions to a third-party accounting firm.

4. Save Time

As a business owner, you have numerous responsibilities to ensure the success of your company. Furthermore, as your business expands, dedicating time to scaling becomes more crucial than managing finances personally.

That’s why outsourcing essential functions like bookkeeping and financial management to professionals such as accounting services in Malaysia is vital. By doing so, you free up valuable time and energy to concentrate on core business activities.

This strategic decision allows you to focus on growing your business and boosting revenue, while leaving financial matters in the capable hands of experts.

5. Scalable Services

Outsourced accounting services offer a significant advantage in terms of scalability and flexibility. As your company expands and various departments are established, the need for comprehensive accounting services grows as well.

It is likely that your internal team of accountants may struggle to keep up with the rapidly evolving requirements, as they are already occupied with multiple aspects of the business.

Rather than burdening them with additional responsibilities or hiring more employees, outsourcing your accounting functions becomes a practical solution.

By outsourcing, you ensure that experts can effectively handle your company’s current needs and adapt to future requirements. This scalability and flexibility provided by outsourced accounting services enable your business to navigate growth seamlessly without compromising on the quality and efficiency of financial management.

6. Better Tools and Practices

Efficiency and reliability in accounting hinge upon employing the appropriate system, standards, and practices. Establishing a robust accounting system with an in-house team can be time-consuming.

By outsourcing your accounting needs, you can ensure that your accounting requirements are addressed comprehensively right from the start.

This approach grants you access to cutting-edge tools and internationally recognized accounting standards, such as US GAAP, guaranteeing that your business’s accounting needs are met optimally.

With the assistance of professional accounting service providers, you can expect a seamless implementation of advanced tools and adherence to industry-standard accounting practices, enabling you to maintain efficient and reliable financial records.

Use Visual Graphics

Using graphics, such as infographics, charts, and other key statistics, is an effective way to present complex information in an easy-to-understand manner. Visual information is typically more digestible for readers, even if they don’t have technical knowledge.

This is important for sustainability reporting because there is a high chance that you are catering to a wide audience with sustainability reports.

If you are creating a digital sustainability report, you can also add videos and animations to engage the viewers and present the sustainability efforts of your organization in an engaging manner. Ultimately, engaging visuals are useful in drawing the audience in and impressing them.

Demonstrate Your Performance

Businesses often tend to discuss and elaborate on abstract concepts related to sustainability in their reports. However, the actual focus of sustainability reporting should be on the company’s performance related to its environmental, social, and governance goals.

Proper data should be presented to convince your target audience of how the company is performing and trying to fulfill its sustainability goals.

Final takeaways

A proper sustainability reporting strategy is integral to the company’s success and reputation. Nowadays, consumers and company stakeholders require businesses to pay special attention to sustainability and ensure they contribute to the economy through sustainable business practices.

Therefore, it is important to consider the aspects discussed in this article and rely on experts, such as an audit firm in Malaysia, who have the knowledge and experience to handle sustainability reporting and craft an engaging sustainability report for the business.

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How to Communicate Sustainability Reporting to Different Audiences

Post author By admin
Post date July 6, 2023

How to Communicate Sustainability Reporting to Different Audiences

Having a sustainable brand strategy is crucial for the success of businesses in today’s world. However, it is not enough to solely focus on sustainable activities; effectively communicating your efforts to various audiences is equally important.

In this article, we will explore the top strategies and practices that you should employ to effectively communicate your sustainability goals, values, and accomplishments.

By implementing these approaches, you can enhance your reputation and build a strong connection with your audience, ensuring that your sustainability initiatives resonate and leave a lasting impact.

Define your Sustainability Goals

First of all, it is important that you have a clear sustainability vision and goals for your business. These goals should align with the overall brand identity and mission of your company.

Moreover, you should make sure that your goals are specific, measurable, achievable, relevant, and time-bound (SMART). It will help you track the progress and report the results.

Be Transparent and True to your Brand

It is a common mistake for many companies to overstate their sustainability efforts in their reporting. However, it is crucial for you to maintain authenticity and uphold maximum transparency throughout your sustainability reporting processes.

Remember that your audience doesn’t expect you to single-handedly solve all the world’s environmental challenges. Therefore, it is important to remain transparent and showcase the genuine efforts your company is making to progress towards a sustainable future.

By doing so, you build trust with your audience and demonstrate your commitment to responsible business practices.

Keep it Simple

The topic of sustainability is quite complex because it covers numerous aspects, particularly within an organization.

It is common for businesses to attempt to include every aspect of their operations in sustainability reporting, aiming to demonstrate their commitment to sustainability to the audience.

However, it is crucial to strike a balance and resist the temptation to include every minute detail in a sustainability report. It is impossible to please everyone in your audience.

Instead, it is advisable to adhere to key sustainability reporting practices, which involve focusing on essential metrics and effectively communicating your business’s sustainability strategy.

By prioritizing important information and key performance indicators, you can provide a clear and concise overview of your sustainability efforts to your audience.

This approach ensures that your sustainability report remains focused, impactful, and aligned with the interests of your stakeholders.

Carefully Craft Your Sustainability Message

Crafting an engaging sustainability message and tone is an important part of sustainability reporting. It should reflect your brand personality and the values of your organization to connect with your target audience.

Make sure that your message is authentic and transparent, without any exaggeration or false claims. You should also be open about the challenges and limitations of your company, show the progress your company is making, and explain how it is addressing sustainability challenges.

Make the Report Unique

When it comes to preparing any kind of document meant to explain your business or business procedures, you have to make sure it stands out from other businesses.

This becomes even more important in sustainability reporting because you are likely to be addressing various aspects of the company in such a report. You should focus on actively engaging the target audience in sustainability communication to ensure your report hits the mark.

Make sure that your sustainability report is powerful and engaging enough to capture the attention of your target audience. Professionals, such as an audit firm in Malaysia, can also help you in this regard.

Use Visual Graphics

This is important for sustainability reporting because there is a high chance that you are catering to a wide audience with sustainability reports.

Demonstrate Your Performance

Proper data should be presented to convince your target audience of how the company is performing and trying to fulfill its sustainability goals.

Final takeaways

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Is GAAP And FASB The Same

Post author By admin
Post date June 13, 2023

Is GAAP and FASB the same?

Accounting, financial management, and financial instruments valuation are complicated procedures that every company has to go through from time to time. These procedures directly impact the reliability and accuracy of business documents and financial reports.

Therefore, it is important to be familiar with the industry standards, such as FASB and US GAAP, so that you can implement the best policies within your company.

In this article, we’ll discuss the important aspects of GAAP and FASB and whether there are any differences between them. Keep reading to learn all about it.

What Is the Financial Accounting Standards Board (FASB)?

The Financial Accounting Standards Board (FASB) is an independent nonprofit organization that has established renowned accounting and financial reporting standards.

These standards are mostly used in the United States, but they also serve as a great guideline for companies around the world.

FASB was established in 1973, after the generally accepted accounting principles (GAAP).

The primary guiding goal of FASB is to carry on the mission of the Accounting Principles Board and facilitate companies in implementing fair, transparent, and standardized accounting principles.

Working of FASB

In the USA, FASB is responsible for establishing and interpreting GAAP for public and private companies as well as nonprofit organizations.

It means FASB acts as a regulatory body, whereas US GAAP is the set of standards for different types of companies, agencies, and nonprofits to follow while they are preparing financial statements and business records.

It is also important to note that FASB is recognized by various government agencies, including the Securities and Exchange Commission (SEC), as the primary body to set accounting standards for companies.

This kind of mass recognition is the reason why FASB and US GAAP are no longer only limited to the USA but are also known in other countries to ensure maximum transparency in accounting standards.

FASB also works with other organizations, such as GASB, to make sure the accounting and financial reporting standards are set for all types of organizations across the board.

Collectively, accounting organizations are working to improve financial accounting and reporting procedures to ensure the accuracy of critical business functions, such as financial instruments valuation.

FASB also provides an opportunity for organizations to educate their stakeholders on the significance of implementing industry accounting standards and ensuring financial transparency.

The FASB itself is governed by seven full-time board members who must resign from any other organizations for the period in which they are governing FASB. It removes any kind of self-interest and ensures transparency in the workings of FASB.

What Are the Generally Accepted Accounting Principles (GAAP)?

Now that you are familiar with FASB, let’s explore the details of US GAAP. It refers to a common set of accounting procedures, rules, and standards that the FASB implements in numerous types of organizations, especially public companies.

Organizations around the world follow US GAAP or modified versions of GAAP to enhance their accounting procedures and ensure maximum compliance with the law.

There are ten guiding principles of GAAP that set the tone for companies to have a standardized accounting system. These tenets are comparable to International Financial Reporting Standards (IFRS).

It is also important to note that organizations have been making a slow and steady transition from GAAP reporting to IFRS to bring about global standardization.

Working of GAAP

US GAAP stands out from the other accounting standards because it is a combination of policies set by the board and commonly accepted methods of reporting accounting data.

Implementing GAAP results in a significant improvement in financial information in terms of clarity, consistency, and comparability.

Overall, both FASB and GAAP play a vital role in governing the accounting industry as per general rules and standard guidelines.

It is a great way of regulating the definitions, assumptions, and methods accountants use in various accounting procedures, such as financial instrument valuation.

Numerous different topics are covered within US GAAP, such as revenue recognition, balance sheet, materiality, preparation of financial statements, and financial reporting.

All in all

The bottom line is that GAAP and FASB are not the same, but they are definitely interlinked to a great extent. GAAP is the accounting standard that the FASB uses to implement accounting procedures in companies.

Overall, both FASB and GAAP are essential in ensuring the accuracy of a company’s accounting standards and making sure that the organization’s financial statements are complete and c

consistent.

It makes it easier for the management and regulatory bodies to handle financial instruments’ valuation and ensure an organization is working with maximum transparency.

Tags us gaap

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Which Financial Instrument Is Traded Most

Post author By admin
Post date June 13, 2023

Which Financial Instrument Is Traded Most?

In financial markets, the phrase “most traded instrument” appears straightforward — yet its meaning depends heavily on how “most traded” is defined. Is it by number of trades, value of trades, or notional volume outstanding?

This makes the answer less intuitive than many assume. This article explores the latest data (as of 2025) and reveals which instrument class leads across major metrics — and what that means for investors and advisors.

Financial instrument valuation is a comprehensive process that most businesses go through at some point to value their businesses. However, many people get confused about what exactly a financial instrument is and which financial instruments are the most traded.

In general, it is better to let experts, such as an accounting firm in Malaysia, handle complicated procedures like financial instrument valuation.

Nevertheless, it is still important for business owners and managers to be familiar with the core aspects of financial instruments. Let’s explore them in detail.

Defining “Most Traded”

Before digging into the data, it’s useful to clarify three key dimensions of trading activity:

Turnover value: The total dollar amount of trades executed in a given period.
Number of transactions: How many individual trades occur.
Notional outstanding/contract value: Especially in derivatives, the total value represented by open contracts.
Different instruments may lead under different metrics. For example, a stock with many trade transactions may rank high by number but not by value.

What Are Financial Trading Instruments?

Financial trading instruments refer to the various types of assets and contracts that can be traded in exchange for a certain value. There are multiple subcategories of trading instruments, including equities, currencies, forward contracts, indices, and many others.

Popular Financial Trading Instruments

A company can have many different types of financial instruments that vary from one business to another. Therefore, it is difficult to say which particular financial instrument is the most traded.

However, there are some highly popular financial instruments that have a massive trading volume. These include:

1. Stocks

Stocks are certainly the most commonly traded instruments in financial markets worldwide, making them traditionally the most traded financial instruments.

Each stock represents a part of ownership in a company. In other words, buying a stock means owning a certain part of the organization.

Generally, a stock is considered good when it is traded in large volumes because it will have higher liquidity. Many different buying and selling factors influence stock prices, resulting in a lot of volatility in the stock market.

2. Exchange-Traded Funds (ETFs)

Exchange-traded funds (ETFs) can be described as collections of assets that form the foundations of stock exchange trading. They have a total value based on their specific securities. There are various types of ETFs, such as metal ETFs, technology stock ETFs, and others.

3. Futures Contracts

Futures contracts are legal agreements that provide detailed information about assets in terms of delivery location, cost, and quantity. They serve as standardized contracts for companies that intend to buy a specific asset at a predetermined price in the future.

The scope of these futures contracts depends on the type and scale of the business. Some of the most common futures contracts trade commodities such as soybeans, cocoa, and crude oil.

4. Forward Contracts

Forward contracts differ from futures contracts because they are not standardized agreements. Instead, there are numerous options to customize forward contracts according to the requirements of the involved parties. Forward contracts are typically used for hedging purposes to minimize the risk of other investments.

5. Options

Options are derivative contracts that derive their value from an underlying asset. There are two main types of options: call options and put options.

A call option provides significant freedom to buy the underlying asset at a predetermined price.

A put option grants the right to sell the underlying asset at a predetermined price.

It is important to note that while options are popular financial instruments, they can be highly volatile. Options are associated with a significant leverage factor, which means they can either yield substantial gains or result in significant losses within a short period.

6. Currency Derivatives

Currency derivatives have a wide scope as they encompass futures, forwards, and options contracts linked to the trading of specific currencies. Forex traders utilize currency derivatives based on currency fluctuations.

7. Metals

Metals such as gold, copper, and silver play an integral role in the financial instruments of many companies. They serve as assets for futures contracts, and some companies also use precious metals as trading instruments.

8. Bond Futures

Bond futures may not be the first preference for many companies, but they offer exceptional liquidity with high trading volume.

Moreover, the high leverage of bond futures is a significant reason why many companies have started incorporating them into their financial instrument trading cycle.

Global Trading Landscape — What the Data Shows

Foreign Exchange (FX) Market

The global FX market remains the largest by value of turnover. According to the Bank for International Settlements (BIS) Triennial Survey for April 2025, total turnover in over-the-counter (OTC) FX markets averaged US $9.6 trillion per day, up 28% from April 2022.

Within that:

FX swaps alone averaged about US $4 trillion a day.
Spot transactions reached about US $3 trillion per day (≈ 31% of FX turnover).
The U.S. dollar was on one side of 89.2% of all FX trades in April 2025.

Equity (Stocks) Market

While equity trading volumes are extremely high in many domestic markets, available global data indicates they are significantly smaller by value than the FX market. For example, a 2025 article noted that the daily foreign exchange market turnover of over US $7 trillion (in prior years) “outstrips all other markets”.

Derivatives & Other Instruments

Derivatives (especially interest–rate derivatives and credit derivatives) also involve very large notional amounts, but comparing them to FX in terms of daily turnover is harder due to data heterogeneity. The BIS survey also reported that trading in OTC interest-rate derivatives denominated in euros reached about US $3.0 trillion daily in April 2025.

So, Which Instrument Is Truly “Most Traded”?

Putting the data together:

If the metric is daily turnover value, the FX market (especially FX swaps and spot) is clearly at the top globally — about US $9.6 trillion/day in April 2025.
If the metric is number of transactions, individual stock trades may outnumber FX trades by count in some markets, but globally available data suggests FX still dominates in value.
If by notional outstanding, some derivatives may compete or exceed, but turnover data favours FX.
Hence, the accurate conclusion is: currency-related instruments (FX) currently represent the most-traded class globally by turnover value.

Why FX Dominates

Several factors explain FX market dominance:

It operates 24 hours on weekdays and is highly globalised.
All major cross-border trade flows, central-bank interventions, and portfolio management involve FX.
Liquidity is immense, facilitating very large transactions at low spreads.
Products like FX swaps serve institutions for hedging funding and currency risk.

Instrument Class	Metric Highlighted	Approx Daily Turnover / Status	Key Take-away
Foreign Exchange (FX)	Daily turnover value	~US $9.6 trillion/day (April 2025) (Bank for International Settlements)	Globally highest by value
Stocks / Equities	Number of trades (varies by market)	Large, but daily value significantly lower	Strong regional/retail relevance
Derivatives (IR, FX)	Notional / turnover	Trillions, data more complex	Important for hedging/large institutions

Common Misconceptions

“Stocks are the most traded instrument” — This is too simplistic. While stocks see huge volumes, they do not lead when comparing global turnover value.
“Most traded means best choice” — High volume does not automatically imply suitability; instrument choice should align with objective, risk profile, regulation and cost structure.
“Domestic market equals global market” — Many investors assume local equities dominate; in reality, the global FX market spans many markets and participants.

All in all

Determining the most traded financial instrument is challenging due to the variety of instruments available and the varying preferences of traders.

However, stocks have traditionally held the title of the most commonly traded instrument globally. Nevertheless, it’s essential to consider the unique characteristics and risks associated with each financial instrument before engaging in trading activities.

If you’re reviewing your instrument exposure, trading platform cost structure or liquidity strategy, our advisory team at [Your Firm] can help you benchmark instruments, execute cost-efficient trades, and align your approach with global market dynamics. Contact us to schedule a portfolio review.

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Are SPACs Suitable For Conservative Investors

Post author By admin
Post date June 13, 2023

Are SPACs Suitable For Conservative Investors?

Special Purpose Acquisition Companies (SPACs) have experienced a significant increase in popularity in recent years because more and more companies want to go public without undergoing the conventional Initial Public Offering (IPO) process.

However, with a growing number of private companies debuting on stock exchanges, investors are facing the dilemma of choosing the right company to invest in.

Since SPACs can be a risky investment, they are generally not considered suitable for conservative investors.

However, with the rising number of SPACs, even conservative investors can invest in them by developing a healthy appetite for risk. Therefore, let’s explore various aspects of SPACs to determine whether they are a good investment.

Evolution of SPACs

SPACs have undergone significant changes over the years. They were first introduced in the 1990s as an appealing option for sponsors. However, their popularity waned due to poor performance.

Nevertheless, SPACs have made a remarkable comeback. Nowadays, SPACs involve higher-quality companies with better management teams and more investors. This has created a reliable investment cycle and facilitated many companies going public.

Benefits of SPACs

SPACs offer several benefits to both businesses and investors. They provide an alternative way for companies to go public instead of pursuing an IPO.

Many companies have successfully gone public through SPACs within a few months, whereas the IPO process can take anywhere from six months to over a year.

Additionally, when selling to a SPAC, the owners of the target company have greater negotiating power due to the limited time available to finalize the deal.

Another significant benefit of merging with or being acquired by a SPAC is gaining access to experienced management, which helps establish a stronger position in the industry.

Risks of SPACs

Despite the numerous benefits, there are also significant risks associated with SPACs. Experts, such as audit firms in Malaysia, are capable of analyzing specific risks unique to each company. Businesses and investors should be mindful of the following risks:

1. Returns

The returns from SPACs may not meet the expectations of investors and business owners. The popularity of SPACs does not guarantee massive success for every company.

In fact, certain experts have warned that a significant downtrend could burst the SPAC bubble and impact the entire market. Such risks are generally too high for conservative investors, leading them to avoid investing in SPACs.

2. Lack of Deals

There is always a risk of an acquisition or merger deal falling through in a SPAC. In 2022 alone, more than 55 SPAC deals were canceled, and they were meant to be deals worth billions of dollars. Multiple reasons and factors can result in the failure of a SPAC deal, such as:

Lack of a suitable acquisition target in time due to management’s failure to identify a suitable private company.
Challenges in negotiating favorable terms for the merger or acquisition.
Lack of capital to complete the process of going public, typically due to a lack of interest from investors.
SPAC shareholders raising objections and rejecting a SPAC deal.

3. Scams

As discussed before, the process of making a company public via SPACs has enjoyed massive popularity in recent years. However, this process does not come without its own risks and scams.

Investors and companies must pay close attention to public companies and ensure they are genuine investable entities.

Authorities around the world have established guidelines for investors to ensure they make smart investments rather than blindly following the trend of investing in SPACs.

Conclusion - Investing In A SPAC

Investing in a SPAC becomes easier when relying on experts like audit firms in Malaysia. It is a great way for public investors to partner with investment professionals and venture capital firms.

The exact process of investing in a SPAC can vary from region to region, but it typically involves exchange-traded funds (ETFs). However, like any other investment, SPACs also carry significant risks, as discussed above. Thorough planning is required to mitigate these risks.

Therefore, it is important for both conservative and experienced investors to thoroughly research a company and make an informed decision before investing, after conducting due diligence

Tags SPAC, Special Purpose Acquisition Company

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Pre-IPO Questions to Ask When Considering Going Public in Malaysia

Post author By admin
Post date June 13, 2023

Pre-IPO Questions to Ask When Considering Going Public in Malaysia

Taking your company public either through a traditional initial public offering (IPO) or SPAC can be a complicated process.

However, thorough IPO readiness assessment and professional pre-IPO advisory services from experts like an audit firm in Malaysia can help you get the maximum benefits of going public.

In this article, we’ll discuss some of the most important pre-IPO questions that you must consider before making your company public in Malaysia.

1. What are the management plans?

It is important for the company executives and management teams to make sure they have clear and concrete plans about how to take the company forward after making it public. Investors are always on the lookout for good investable companies, but they are also quite skeptical of the newly listed companies due to heavy competition.

Therefore, the management must be ready to explain the company’s unique selling points and competitive advantages to convince the investors about the ways in which the company will grow after the IPO. It will ultimately facilitate the company in getting more investors on board.

2. What type of market should the company choose for listing?

There are three types of markets in Malaysia where you can list your company. These markets are:

Main Market

This is the perfect market for well-established companies that meet the highest possible quality and operation standards. Companies listed in the main market are easily accessible to the public.

ACE (Access, Certainty, Efficiency) Market

It is a sponsor-driven market accessible to public investors. Generally, fast-growing businesses tend to go public in the ACE market. It is better to conduct a thorough IPO readiness assessment before going public on the ACE Market.

LEAP (Leading Entrepreneur Accelerator Platform) Market

Another popular market for public companies is the LEAP market. It is a highly adviser-driven market that welcomes all types of small and medium enterprises. However, the LEAP market is only accessible to experienced investors, such as accredited investors, high net-worth entities, and individuals with very high net worth.

3. How well can the management meet the requirements?

IPO involves comprehensive planning and the preparation of numerous reports. When you are in the process of going public, you must analyze the preparation level of the management to ensure they can meet the requirements and expectations associated with a public company.

Moreover, a certain process is required to make sure the management is able to deal with the business results in an efficient manner. Investors expect the management of a public company to accurately forecast financial results and deliver results to enhance profitability. This must be displayed by the management to impress the investors and make sure they trust the company enough to invest in it.

Moreover, companies should also keep in mind that they might have to go through significant organizational and system changes while making the company public to meet legal requirements and equip the company to meet the challenges of a public organization.

4. What measures are suitable for the company?

There are certain standards that public companies are expected to follow and implement to meet statutory requirements. Private companies often have their own working procedures that might even deviate from generally accepted accounting principles (GAAP).

Nevertheless, once a company becomes public, investors, auditors, and other stakeholders expect that the company follows the same metrics, measures, and reporting standards as other companies.

Therefore, it is important for companies to rely on experts and professional audit firms in Malaysia during the IPO readiness assessment process to analyze the existing procedures and update them as per industry standards.

It is the responsibility of the company directors to make sure that the management is aware of the critical metrics across the different departments of the organization and how they align the reports with these metrics.

Moreover, the board also works closely with the management to set plans to achieve the target and ensure the maximum accuracy of the set metrics.

5. What are the top three risks for the management?

There are multiple different risks involved in an IPO. Most of these risks are identified by professional pre-IPO advisory services in the planning stage.

It is highly recommended that you narrow down the top three risks to make sure the company management can deal with such risks more effectively instead of getting distracted by every potential minor issue.

Final takeaways

There are various questions and aspects that a company must consider while going public in Malaysia.

Such questions vary from the core organizational structure to the future planning of the company’s management about how it plans to deal with the legal and financial requirements of operating a public business.

Ultimately, an IPO can be difficult, but it can be made easier with comprehensive IPO readiness assessment and guidance from experienced audit firms in Malaysia.

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Biggest Mistakes To Avoid When Getting An IPO

Post author By admin
Post date May 9, 2023

Biggest Mistakes To Avoid When Getting An IPO

Taking a company public is the dream of many entrepreneurs. However, if you search the statistics, you are likely to find hundreds of examples of failed initial public offerings (IPOs).

In fact, by relying on experts, such as an audit firm in Malaysia, for professional pre-IPO advisory services, companies can significantly increase their chances of being successful in their IPO.

The goal of this article is to discuss some of the major mistakes you must avoid when getting an IPO.

Lack of an experienced team

An IPO is bound to affect every department and working procedure of a company. As a result, it is important to have the right teams working across the organization to make the IPO process successful.

The roles of these teams or team members can vary as per the department in which they work. Some of the critical areas you should focus on are:

Having an experienced finance team to create an automated system for the production of accurate financial reports can be the make-or-break factor of most IPOs.
Make sure you have a standardized accounting and auditing system in place to handle finances during and after the IPO.
Modern tools and technologies should be used to set up a reliable control environment with comprehensive and easy-to-understand documentation.
You must have a strong legal team to deal with the numerous aspects of an IPO. Keep the legal team intact even after the company has gone public.

Lack of Understanding of the IPO's Intent

Once you make the decision to go public, you have to realize the intent of the IPO and have a reliable starting point. Professional IPO readiness assessment plays an important role in it.

The intent of the IPO basically means why you are going through the extensive IPO process and what you will achieve by the end of this process. It will help you align the company goals and internal teams with the end goals.

Moreover, it is important to be fully familiar with the current state of the company so you can chart out a successful path to complete the IPO process in the best way possible. An audit firm in Malaysia can help you with thorough business analysis and IPO planning.

Over Promising

Companies that start the IPO process without proper planning tend to over promise on milestones to get the IPO completed.

This can result in severe complications in the post-IPO phase of the company, especially when the company’s management is not able to achieve the milestones within 12 months of the IPO.

The best way to avoid this issue is to rely on experts for pre-IPO advisory services, make sure that the company is ready to go public, and set realistic goals to achieve within a specific timeline.

Lack of transparency

IPOs have a great impact on every department and level of an organization. Therefore, it is critical that you ensure maximum transparency in communication between all the stakeholders of a company.

You have to make clear and comprehensive guidelines about the IPO process and make sure proper controls are in place to implement these policies. Moreover, the communication process should evolve with the progress of the IPO.

The initial stage is typically focused on the intent of the IPO and the end goals you are expecting from the IPO process.

Later on, regular communication with the experts and regulatory boards becomes important to ensure all of the stakeholders are on the same page to make the IPO successful.

Lack of readiness

There are a large number of mistakes that can make an IPO a failure, but the most common is a lack of readiness.

A lot of companies make the mistake of going public without proper planning and doing the required research to create realistic goals.

Hence, it is important to rely on professional audit firms in Malaysia to analyze your business and help you make achievable growth goals through an IPO readiness assessment.

These professionals can guide you throughout the IPO process and make sure you have all of the relevant and up-to-date information about taking your company public.

They will also help your organization prepare for fluctuating market conditions, so you should definitely rely on the experts for their advice and expertise in IPOs.

Conclusion

The bottom line is that an IPO can certainly be a complicated task for companies, especially because it comes with various risks. Nevertheless, with proper planning and pre-IPO advisory services, you can ensure that an IPO is the right path for your business.

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SPACs vs. Reverse Mergers Which is the Better Option

Post author By admin
Post date May 9, 2023

SPACs vs. Reverse Mergers Which is the Better Option

Special purpose acquisition companies (SPACs) and reverse mergers are two of the most popular methods through which private companies can go public. Both of these methods have significant similarities, but they also differ from each other in terms of their specific working methods.

Let’s discuss the various aspects of SPACs and reverse mergers in detail so that you can choose the best method to take your company public.

Overview of Reverse Mergers

A reverse merger is a type of transaction through which a private organization is able to merge with a publicly traded shell company.

As a result, the private entity does not have to go through the traditional initial public offering (IPO) process. Instead, the private company takes over the publicly traded shell company.

It is important to note that the role of a reverse merger transaction is much more than going public. Private organizations also use reverse mergers to raise capital, enhance their visibility, and get better access to the public markets.

Overview of a SPAC

A SPAC is a publicly traded entity that raises capital via an IPO with the end goal of acquiring a private company. It is different from the conventional IPO process and is often considered to be a more reliable option for going public.

Once a SPAC has raised enough capital, it will start searching for a suitable private company to acquire. These steps involve target company identification, deal finalization, and company acquisition.

By the end of the process, a private company becomes publicly traded without going through the expensive and time-consuming process of a traditional IPO. An audit firm in Malaysia can help businesses choose the best method to go public.

Differences Between SPACs and Reverse Mergers

There are various similarities between SPACs and reverse mergers because both of them are meant to help a private company go public. Nevertheless, there are some distinct differences between them as well. It is important to be familiar with these differences to choose the best way to go public.

Oversight

One of the most significant differences between SPAC and reverse mergers is the kind of oversight required by these methods.

A traditional IPO involves much more regulatory oversight than any of these methods. You have to disclose complete financial information in a conventional IPO, which can take a lot of time.

On the other hand, SPACs and reverse mergers both have less regulatory oversight, especially SPACs. As a result, the process of going public is quicker and less time-consuming.

Identification of the Target Company

Another difference between a SPAC merger and a reverse merger is associated with the identification of the target company.

In a SPAC, you have to identify the target entity before the merger is completed. On the other hand, a reverse merger involves a private company that is under the control of a public shell company.

As a result, a SPAC merger provides more control to the target company over the specific terms and conditions of the merger. In comparison, a reverse merger provides more control to the private company over the terms of the merger.

Transparency Issues

It is important to note that both SPACs and reverse mergers have often been criticized for passing over the traditional IPO process.

The issue of transparency is even more prominent with reverse mergers, as many argue that they provide a way for companies with poor financials to enter the public markets.

Companies that don’t rely on experts, such as audit firms in Malaysia, might not have sufficient financial and legal documents. As a result, the transparency issues became even more severe.

Nevertheless, it is important to note that not all organizations that go public via SPAC or reverse mergers have poor financials. In fact, nowadays, most companies pay special attention to their financial health before even initiating these procedures.

Option to Redeem

In a SPAC merger, investors have the option of redeeming their investments. It is useful in setting a floor under the stock price as per the date of the merger’s completion. However, the option of redeeming is not available in reverse mergers.

Moreover, SPAC shareholders also have the right to vote on the proposed merger. If the vote is unsuccessful in winning approval, the sponsor will likely have to liquidate the SPAC and return all of the funds to the investors.

All in all

Overall, there are significant similarities as well as differences between SPAC and reverse mergers. If you are thinking of taking your company public, it is highly recommended to rely on professional audit firms in Malaysia to choose the best path through a reverse merger, or SPAC.

Tags SPAC, Special Purpose Acquisition Company

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US GAAP vs. Non-GAAP Accounting: What You Need to Know

Post author By admin
Post date May 9, 2023

US GAAP vs. Non-GAAP Accounting What You Need to Know

GAAP stands for “Generally Accepted Accounting Principles.” It is a set of standardized accounting formats, rules, and guidelines related to the recognition or disclosure of companies. Companies around the world rely on US GAAP as their primary accounting standard.

However, there are also many companies that don’t fully follow GAAP. Instead, they operate as per the non-GAAP method. It includes any method of accounting other than GAAP where non-prescribed or nonstandard accounting principles are followed.

In this article, we’ll discuss the major differences between US GAAP and non-GAAP, so keep reading to learn all about them.

Overview of US GAAP

The Financial Accounting Standards Board (FASB) and the US Securities and Exchange Commission (SEC) are behind the creation and administration of GAAP accounting standards.

The primary goal of the GAAP standards is to have a uniform and standard way of evaluating the financial health of a company.

Some of the leading GAAP principles are:

Recognition of a company’s revenue and expenses.
Type of expenses that a company has capitalized as assets.
Way of presenting information to shareholders.
The way things are disclosed in notes to financial statements.

Generally, public companies use GAAP, but due to the standardization of these rules, many private companies also follow US GAAP methods to improve their accounting and auditing functions.

Overall, GAAP is highly useful for both investors and auditors. These standards make sure that you don’t have to create or implement accounting standards from scratch.

Instead, these globally accepted accounting standards are available to facilitate businesses’ following the best accounting practices.

Nevertheless, GAAP reporting has certain limitations as well. In some cases, investors don’t get a complete picture from these reports, especially when they are looking for a long-term plan for an organization. In such a situation, companies typically have to adopt non-GAAP reporting standards.

Overview of Non-GAAP

Non-GAAP refers to the alternative accounting standards and measures followed by private and public companies. Some companies often follow both US GAAP and non-GAAP standards as per their own working procedures.

However, it is important to note that when a company uses non-GAAP, it must disclose it in its reports.

Otherwise, it can result in significant challenges related to financial reporting and regulatory compliance.

Companies typically choose to use non-GAAP methods when they want more control over their internal accounting procedures, and the stakeholders believe US GAAP to be inconsistent with their business environment.

The extent of non-GAAP can greatly vary, but it typically includes unusual expenses, non-cash charges, company restructuring details, litigation, and other such information that is unique to the business.

Differences

Following are the key differences between GAAP and non-GAAP:

Accounting

GAAP has a certain set of standards, formats, and accounting methods that the company must follow. On the other hand, non-GAAP does not have any prescribed or specific accounting methods.

Investors

Investors, professional accountants, and financial advisors are typically familiar with US GAAP standards. Hence, they can easily analyze the reports and documents made using GAAP.

Nevertheless, GAAP reports are quite challenging to understand for inexperienced and common users. In such a situation, non-GAAP is more useful to cater to all types of audiences.

Standard

While both US GAAP and non-GAAP are adopted by numerous companies, it is important to note that GAAP is the only industry standard.

As a result, regulatory authorities and experts familiar with GAAP are much more likely to prefer companies that follow GAAP in their accounting procedures.

Business Operations

US GAAP standards are meant to show a clear and complete picture of the business operations in terms of the financial health of the company. Non-GAAP requires adjustments to make sure it gives a complete picture of business operations.

Non-Recurring Expenses

One of the most significant differences between GAAP and non-GAAP is that non-recurring expenses are included in GAAP but excluded from non-GAAP.

Window Dressing

US GAAP has very strict standards and accounting methods. It does not provide any scope for window dressing profitability in financial statements.

However, there is significant scope for “window dressing” of profitability in non-GAAP financial statements. This is a major reason why budding entrepreneurs and scaling businesses often prefer non-GAAP.

Comparison

GAAP reports involve the comparison of financial results from industry to industry, company to company, and year to year. However, non-GAAP does not involve any kind of comparison between companies or industries.

In Closing

Keeping all of the above factors in mind, it is evident that both US GAAP and non-GAAP have their own place in the accounting industry.

They facilitate organizations all over the world to bring fairness and transparency to their accounting standards to ensure the financial health of the company is crystal clear to all stakeholders.

Tags us gaap