Key Points

• Two new accounting standards are fully effective this year: ASU 2023-08 on crypto assets and ASU 2023-05 on joint venture formations 
• These standards change measurement and presentation requirements for 2025 financial statements 
• Companies should confirm that their 2025 reporting reflects the updated requirements 

Understanding the Standards Now in Effect for 2025 Reporting 

With 2024 reporting now behind us, calendar year-end nonpublic entities are turning their attention to the 2025 reporting cycle. This year brings two notable Accounting Standards Updates (ASU) issued by the Financial Accounting Standards Board (FASB): ASC 2023-08, which changes how certain crypto assets are measured and disclosed, and ASU 2023-05, which establishes new recognition and initial measurement requirements for newly formed joint ventures.  

Over the past several years, the volume of major standard-setting has slowed compared with the era of significant adoptions such as current expected credit losses (CECL), lease accounting, and revenue recognition. These two ASUs represent meaningful areas of focus for preparers as they evaluate their 2025 reporting and ensure compliance with updated guidance.  

As nonpublic entities prepare their 2025 financial statements, both standards will be applied for the first time. They influence how certain transactions are measured, disclosed, and presented, and their impact spans a wide range of industries. Even if your business has limited involvement with crypto assets or joint venture activity, it is essential to determine whether you fall within the scope and whether your reporting reflects the required changes. 

With these standards now in effect, this is an ideal time to take a clear and final look at what they require. Ensuring that fair value measurements, transition adjustments, and disclosures are in place will help streamline the reporting process and support the preparation of accurate and compliant financial statements for 2025. 

ASU 2023-08: Accounting for and Disclosure of Crypto Assets 

Summary 

ASU 2023-08 provides guidance for accounting for crypto assets, including six criteria that assets must meet to qualify as crypto assets.  These assets must meet the definition within U.S. GAAP of an intangible asset; do not give the asset holder enforceable right to, or claims on, underlying goods, services, or other assets; are generated or reside on a distributed ledger based on blockchain or similar technology, are secured through cryptography, are fungible, and are not generally or issued by the reporting entity or any of its related parties. The new standard does not apply to nonfungible tokens or to digital assets subject to existing U.S. GAAP, such as stablecoins.  

Effective Date for Nonpublic Entities  

Fiscal years beginning after December 15, 2024.  

What Changed 

Crypto assets must now be measured at fair value as of each reporting date, with any resulting gains or losses reflected in net income. This change replaces the historical cost-less impairment model and may introduce more volatility into earnings. 

The standard also includes expanded disclosures related to asset type, valuation, and risk. 

Financial Statement Presentation Impact 

• Balance sheet: Present crypto assets separately from other intangible assets, measured at fair value 
• Income statement: Present changes in fair value (gains and losses) that are included in net income separately from changes in the carrying value of other intangible assets. 
• Cash flow statement: Present the sale of crypto assets as noncash consideration in the ordinary course of business. The ASU does not give other guidance on presentation and cash flows continue to follow the nature of the transactions, supported by ASC 230, Statement of Cash Flows.  

Transition Adjustment 

The standard requires a modified retrospective approach with a cumulative effect adjustment to opening retained earnings as of January 1, 2025. Businesses should ensure this adjustment is reflected and supported in their 2025 reporting. 

ASU 2023-05: Recognition and Initial Measurement 

Summary 

ASU 2023-05 sets new requirements for the initial accounting of joint ventures. Under this guidance, a newly formed joint venture must apply a new basis of accounting and recognize contributed net assets at their fair value upon initial formation of a joint venture. This new guidance does not change the definition of a joint venture, an equity investor’s accounting for its investment, or the accounting by a joint venture for contributions received after formation.  

Effective Date for Nonpublic Entities  

Joint Ventures formed after January 1, 2025. 

What Changed 

A newly formed joint venture recognizes a new basis of accounting for contributed net assets as of the formation date. The joint venture will measure the contributed identifiable net assets at fair value on the formation date, measure the net assets’ fair value based on 100% of the joint venture’s equity immediately following formation, and record goodwill for the difference between the fair value of the joint venture’s equity and its net assets. 

Financial Statement Presentation Impact 

• Balance sheet: Present net assets at fair value at formation 
• Income statement: Future depreciation, amortization, and impairment will reflect fair value amounts recognized at formation 
• Cash flow statement: Cash flows follow the nature of the transactions based on fair values established at formation 

Transition Adjustment 

The transition method of this standard depends on the timing of the formation date. The standard will be applied on a prospective basis and affect all joint venture formations on or after January 1, 2025. A joint venture formed prior to that date may apply the amendments to the standard retrospectively, if the joint venture has sufficient information available.  

Bringing These Standards into Your 2025 Reporting Process 

With both ASUs now fully effective, nonpublic entities should verify that their financial statements reflect the correct measurement, presentation, and disclosure requirements. Confirming transition entries, providing fair value support, and ensuring compliance with the guidance enhances the accuracy and clarity of your 2025 results. 

Strong documentation and thoughtful preparation help ensure that these updated standards are incorporated smoothly into your reporting process. If questions arise as you work through these requirements, the Walter Shuffain team can help you assess what applies to your business and guide you on how to address the changes within your reporting timeline. Our goal is to help you navigate these updates with clarity and confidence so your financial statements tell the whole story of your year. 

Frequently Asked Questions 

1. How do I know if the new crypto asset accounting rules apply to my company?
   The standard applies if you hold crypto assets that meet the scope criteria, including being intangible, fungible, cryptographically secured, and recorded on a blockchain. If you held any such assets during 2025, the fair value model applies. 
2. What happens if my company did not record the adjustments for the new standards?
   You will need to correct this during the reporting process to ensure the transition is applied correctly. Addressing it now helps avoid further complications in your financial statements. 
3. How can I determine whether the entity we formed qualifies as a joint venture under US GAAP?
   Review the structure, shared control, and purpose of the entity against the GAAP definition of a joint venture. If the entity meets that definition and was formed in 2025, the new fair value basis at formation is required. 
4. What steps should my company take to prepare accurate 2025 financial statements under these standards?
   Verify all fair value measurements, ensure the required transition entries were recorded, review your disclosures for completeness, and gather supporting documentation for valuations and formation activity. 

The post Understanding the 2025 Accounting Standards for Crypto Assets and Joint Ventures appeared first on Walter Shuffain.

Business owners typically consider two primary financing options: debt and equity. Each presents distinct advantages, disadvantages, and accounting considerations. Determining the most appropriate approach depends on the business’s specific financial needs and strategic goals.

What’s the Difference?

Debt financing refers to obtaining capital through borrowed funds repaid over a defined period, typically with interest. Familiar sources include bank loans, lines of credit, or asset-backed lending. Business owners retain full ownership and control but are legally obligated to make repayments on schedule.

Equity financing, in contrast, involves raising capital by selling a portion of ownership to investors. These may be private individuals, venture capital firms, or other entities. While this method does not create repayment obligations, it sometimes involves sharing future profits and decision-making authority.

What It Means for Your Financials

From an accounting perspective, these two options look very different on paper.

Debt shows up as a liability on your balance sheet. That affects ratios like debt-to-equity and can make lenders more cautious if you already carry a lot of debt. On the plus side, interest payments are typically tax-deductible, which helps lower your taxable income.

Equity, on the other hand, increases the owners’ equity section of your balance sheet. You won’t have new monthly payments to worry about, but your profits will now be shared. Any dividends paid to shareholders come out of after-tax dollars—not tax-deductible.

Why You Might Choose Debt

Debt financing works well if your business has steady revenue and a clear plan for paying it back. It’s often the best option when you need funds for long-term goals—like buying equipment or managing seasonal swings in cash flow.

One of the primary benefits of debt financing is that it allows business owners to maintain complete control. There is no dilution of ownership, no obligation to share profits, and the terms are limited to a defined repayment schedule.

However, debt financing also introduces certain risks. Taking on too much debt can tie your hands later—mainly if your loan includes restrictions, known as covenants, that limit your ability to borrow more or spend in specific ways. If your cash flow takes a hit, meeting those monthly payments could get stressful fast.

From a financial management standpoint, this route works best with strong internal controls and reliable forecasting. It is crucial to stay on top of your liquidity and interest coverage ratios to avoid getting in over your head.

When Equity Might Be the Better Fit

Equity financing tends to be a good fit for businesses in active growth, especially if you’re just getting started or don’t have the credit profile to qualify for loans.

The primary appeal of equity financing lies in its flexibility—businesses gain access to capital without the immediate burden of regular repayment obligations. This financial runway can be particularly beneficial when allocating resources toward long-term initiatives such as marketing, product development, or talent acquisition.

However, this approach also has trade-offs. Accepting equity investment means sharing future profits and, in many cases, a degree of control. Investors often expect ongoing communication, involvement in strategic decisions, and, at times, formal influence over business direction.

From an accounting perspective, equity brings a different kind of complexity. You’ll need to track ownership changes, build a cap table, and potentially provide more formal reporting. Now’s the time if you’re not already working closely with your accountant.

Making the Call

To determine the best fit for your business, ask the following:

• Can I afford monthly repayments if revenue dips?
• Am I comfortable giving up a share of ownership?
• What will this look like on my balance sheet in six months?
• Do I want quick funding now or long-term backing with strategic input?

Sometimes, the answer isn’t one or the other. Many businesses combine debt and equity financing to balance maintaining control and securing the necessary capital.

Aligning Capital Strategy with Business Vision

How you finance your business can significantly influence its direction and long-term success. Debt and equity each have a role, depending on your business needs. The important thing is understanding how each will affect your financials—not just today, but down the road.

Before making a move, talk with your accountant or advisor. Consider ownership, cash flow, and long-term impact. With the right plan, financing can be more than just a lifeline—it can be a smart strategy for growth.

The post Debt vs. Equity Financing: Which One Fits Your Business Best? appeared first on Walter Shuffain.

This article outlines practical, accounting-informed strategies to help you make smart financial moves as your company grows.

1. Review Entity Structure as You Scale

As your business grows, your current structure may no longer serve you effectively. For instance, sole proprietorships and partnerships often result in higher self-employment taxes, which can limit profitability.

Many businesses transition to an S corporation or Limited Liability Company (LLC) to improve tax efficiency. S Corporations allow owners to take a portion of income as distributions rather than wages—potentially reducing self-employment taxes.

Accounting Tip: Evaluate how much of your income can be shifted into distributions without triggering IRS scrutiny. Review reasonable compensation standards annually with your CPA.

2. Use Section 179 and Bonus Depreciation for Asset Investments

Business expansion often comes with major investments—whether in equipment, technology, or vehicles. Instead of spreading the cost over several years through standard depreciation, you can take advantage of Section 179 and the 40% bonus depreciation rules to deduct a significant portion of the expense in the year the asset is placed in service.

In 2025, bonus depreciation remains at 40%, but it’s scheduled to phase out gradually in the coming years. That makes the timing of your purchases a powerful tax planning strategy.

Accounting Tip: Ensure purchases qualify for accelerated depreciation. Keep detailed records of asset costs, dates placed in service, and business use percentages to support your deductions.

3. Maximize Tax Credits Before Year-End

Don’t leave money on the table. Federal tax credits can reduce your tax bill dollar for dollar. Some of the most impactful credits for expanding businesses include:

• R&D Tax Credit – Qualifying activities include developing or improving products, processes, or software. While related costs must now be amortized over five years, the credit still offers valuable, immediate tax savings.
• Work Opportunity Tax Credit (WOTC) – Hiring employees from targeted groups (e.g., veterans or long-term unemployed) can trigger credits up to $9,600 per hire. WOTC is currently authorized through December 31, 2025.
• Energy-Efficient Commercial Building Deduction (Section 179D) – For upgrades that improve HVAC, lighting, or insulation.

Accounting Tip: Credits require timely documentation and sometimes certification. Your accountant can help ensure eligibility and maximize value.

4. Plan for Multi-State Tax Compliance

Expanding into new states—whether through remote employees, sales, or physical presence—can create nexus, meaning you may owe income, franchise, or sales taxes in those states.

Each state has its own rules. Failing to register or file can result in penalties or interest.

Accounting Tip: Your accounting team should run a nexus study annually. They’ll use revenue data, payroll records, and inventory locations to assess exposure and file accordingly.

5. Create a Tax-Efficient Reinvestment Strategy

Unexpected tax bills can quickly drain cash flow from growth. Work with your accountant to estimate quarterly tax payments and set aside reserves throughout the year.

Then, consider reinvestment strategies that also offer tax benefits—like funding retirement plans (e.g., SEP IRAs, solo 401(k)s), providing health insurance or fringe benefits, or reinvesting in new product development.

Accounting Tip: A cash flow forecast that includes tax liability projections is a powerful tool for decision-making. Revisit this model quarterly as your business grows.

Scaling Smart: Let Tax Strategy Fuel Your Growth

Tax planning is not just about avoiding problems—it’s about uncovering opportunities. Strategic accounting during growth phases can minimize taxes and maximize reinvestment potential.

Don’t wait until tax season. A proactive approach—grounded in accurate financials and strategic foresight—sets the foundation for sustainable, profitable scaling.

The post Proactive Tax Planning for Expanding Businesses appeared first on Walter Shuffain.

Below, we break down 12 key proposed changes compared to current law:

1. Individual Income Tax Rates

• Current: TCJA rates (10%–37%) expire after 2025
• Proposed: Makes TCJA brackets permanent, avoiding reversion to 39.6% – avoiding automatic tax hike for individuals and high earners.

2. Standard Deduction

• Current: Doubled under TCJA through 2025
• Proposed: Makes increase permanent; adds a temporary $1,000–$2,000 boost (2025–2028)

3. Child Tax Credit

• Current: $2,000 per child, partially refundable
• Proposed: Increases to $2,500 (2025–2028), then $2,000 (indexed); refundable portion rises to $1,700

4. Alternative Minimum Tax (AMT)

• Current: Higher exemption through 2025
• Proposed: Permanently extends higher TCJA-level exemption amounts.

5. Estate & Gift Tax

• Current: ~$13.6M exemption in 2025, reverts to ~$7M in 2026
• Proposed: Raises exemption to $15M per person ($30M per couple) permanently, indexed for inflation.

6. SALT Deduction Cap

• Current: $10,000 cap through 2025; unlimited deduction returns in 2026.
• Proposed: Raises cap to $40,000 for income under $500K; remains $10,000 above that; cap is permanent and indexed.

7. Tips & Overtime Tax Relief

• Current: Fully taxable as wage income.
• Proposed: Temporarily (2025–2028) exempts qualified tips and overtime pay from income tax for earners under ~$160K.

8. Car Loan Interest Deduction

• Current : No deduction for personal auto loan interest.
• Proposed: Temporary above-the-line deduction (2025–2028) of up to $10K interest for income under $200K joint/$100K single.

9. Pass-Through Deduction (Section 199A)

• Current : 20% deduction through 2025; scheduled to expire.
• Proposed: Makes deduction permanent; increases to 23%; retains phase-out for high-income service businesses.

10. Bonus Depreciation

• Current: 40% in 2025; phased out by 2027.
• Proposed: Restores 100% bonus depreciation from mid-2025 through 2029.

11. R&D Deduction

• Current : Amortization over 5 years (15 for foreign R&D) since 2022.
• Proposed: Allows immediate expensing of domestic R&D costs through 2029.

12. Business Interest Deduction (163(j))

• Current: Limited to 30% of EBIT (stricter standard).
• Proposed: Reverts to 30% of EBITDA for 2025–2029, allowing greater interest deductions.

Summary & Next Steps

This bill represents the most significant tax legislation since 2017. It aims to cement TCJA-era reforms, provide temporary taxpayer relief, and support business investment.

If you’re a high-income earner, own a pass-through, manage real estate, or invest in R&D, this proposal could significantly impact your planning. Walter Shuffain will continue to monitor legislative progress and provide updates.

Let us know if you’d like help evaluating how these changes might affect you.

The post What’s in the “One Big Beautiful Bill Act”? appeared first on Walter Shuffain.

In the complex world of employee benefit plans, fidelity bonds serve as a crucial safeguard against losses caused by financial malfeasance. Given the costs and vagaries of litigation, plan sponsors and participants may have no recourse when plan assets are stolen except for fidelity bonds that cover first dollar losses with no deductible. In fact, the Employee Retirement Income Security Act (ERISA) requires most retirement plans to have such coverage regardless of the number of participants or the value of plan assets.

However, misconceptions and confusion surrounding these bonds can often lead to compliance pitfalls for plan sponsors. This article aims to provide clarity by “busting” common myths and misunderstandings about ERISA fidelity bonds and leading sponsors on a path to compliance.

Fidelity Bond Facts

Gaining a basic understanding of fidelity bonds can aid in uncovering the truth about them:

General:

• Bonds are mandatory for most retirement plans, with exceptions for unfunded plans and those not subject to ERISA Title I, such as some government and church plans.
• Form 5500, which is signed under penalty of perjury, asks whether the plan has a fidelity bond.
• Bonds may be standalone or included in an insurance policy.
• Plan sponsors must obtain bonds from a company approved by the Department of the Treasury’s Listing of Approved Sureties. The company name does not need to include the word “fidelity.”

Bond amounts:

• As mandated by ERISA, generally, fidelity bonds must cover 10% of fund assets (determined as of the last day of the prior year) up to a certain dollar amount limit.
• The minimum required amount is $1,000. The maximum required for most plans is $500,000, but the maximum required for plans that include employer securities (e.g., ESOPs and KSOPs) is $1,000,000.

Coverage:

• Fidelity bonds must cover anyone who handles the funds or property of an employee benefit plan, including but not limited to fiduciaries and some third-party service providers.
• The bond must cover the handling of all plan assets, regardless of type or location.
• ERISA fidelity bonds must provide first dollar coverage with no deductible to the plan.

Armed with this basic knowledge, common myths can be tackled.

Myth #1: Fidelity Bonds vs. Fiduciary Insurance Coverage

“My company’s fiduciary insurance covers the plan’s ERISA fidelity bond requirement.”

Fiduciary insurance and fidelity bonds serve entirely different purposes.

A plan’s fiduciary liability insurance protects it against a fiduciary’s breach of duty. For example, an individual trusted to manage plan assets may breach their duties by engaging in risky transactions that reduce plan assets. This person’s breach of fiduciary duty potentially would be covered by the plan’s fiduciary liability insurance coverage.

In another scenario, though, someone with access to payroll deductions — not limited to fiduciaries — could divert funds to a phantom account. The plan’s fidelity bond could cover the loss, up to the maximum amount of the bond.

Myth #2: Obtaining Retroactive Coverage

“Retroactive fidelity bonds are easy to get.”

Plan audits often reveal that a plan has been operating without a fidelity bond. In such cases, the Department of Labor (DOL) will require the plan sponsor to obtain coverage and may ask that the coverage should be obtained for all years where a bond was not in place. However, retroactive fidelity bonds may be unavailable because insurers are typically prohibited by state law from issuing retroactive coverage. Instead, a plan sponsor can work with the DOL to document its attempts to comply with the fidelity bonding requirement and can maintain proper coverage going forward.

Myth #3: Fidelity Bond vs. Plan Audit Requirement

“We don’t need a fidelity bond because our plan doesn’t meet plan audit requirements.”

This myth is fairly easy to debunk. It’s true that ERISA does contain provisions about both fidelity bonds and plan audit requirements; the size of the company matters with plan audits but not with fidelity bonds. ERISA specifically requires fidelity bonds for most plans, regardless of the number of employees or the size of the plan. The plan audit requirements typically apply to plans with 100 or more participants. A plan can be exempt from the audit requirements yet still be required to have a fidelity bond.

Myth #4: Automatic Coverage

“Our D&O insurance coverage automatically covers fidelity bonds.”

A directors and officers (D&O) insurance policy may include a general fidelity bond, which may or may not satisfy the requirements for ERISA fidelity bonds. However, such inclusion is generally not mandatory. Because coverage varies from policy to policy, the person or group responsible for maintaining insurance coverage should review all policies to determine whether a separate fidelity bond is included and whether the bond meets all ERISA requirements. For example, like many other insurance policies, D&O coverage often includes a deductible; however, ERISA requires fidelity bonds that carry no deductible. Maintaining fidelity bonds and insurance policies requires a periodic review of both.

Myth #5: Fidelity Bonds and Cybersecurity Concerns

“Our ERISA fidelity bond covers theft through cyber means.”

While fidelity bonds might cover cybersecurity issues, it is best not to assume that such protection exists. As with D&O insurance, reviewing the terms of any fidelity bond can help clarify the bond’s stance toward cyber issues. Plan sponsors can voluntarily obtain combination policies that combine fidelity bond coverage with cybersecurity coverage, as long as the bond meets all other ERISA requirements.

Because of cyber risks to employee retirement plans, the DOL has issued guidance for plan sponsors that emphasizes the need for separate protection against cyber threats.

Does Your Plan Fully Comply with ERISA and Other Laws?

How well is your employee retirement plan protected from theft and fraud? Before falling victim to any myths mentioned in this article, reach out to our team for guidance.

The post ERISA Fidelity Bonds: Myth Busting Five Common Misconceptions appeared first on Walter Shuffain.

Transitioning Ownership

The decisions made regarding ownership of the family office or closely-held business may not necessarily be the same decisions that are required for leadership and management. It’s critical to understand and acknowledge the different elements that proper succession planning entails.

The family wealth enterprise has three interconnected circles of participation—the family members, the family’s business and the ownership of wealth—and each circle requires a succession plan. Those plans should reflect the family’s shared values and aspirations, and they should be implemented with business-like focus and diligence that is tailored to each family’s dynamics and relationships.

To successfully transition the family ownership, business and financial wealth to succeeding generations, leaders must be groomed and/or nurtured to assume the mantle of these responsibilities with competence. Moreover, to ensure that the family legacy remains intact and on course, each person assuming a new role must embrace the family’s common vision. Outlining deliberate plans to accomplish related goals across the family, business and ownership will help achieve an orderly, prosperous succession that protects the family legacy for generations to come.

What is Succession Planning and Why Is It So Important?

Robust governance practices form the cornerstone of success for the family wealth enterprise, and ongoing succession planning is one element of a mature governance system. As a family considers its future succession, it is vital to understand why a well-conceived plan is so important and what the critical elements of the plan entail. The succession plan prepares heirs to transition successfully and preserve, grow and pass wealth from generation to generation. Otherwise, the family wealth enterprise can diverge from the family’s values, philosophies and direction, which may erode family unity, endanger the legacy and dissipate financial wealth.

Effective governance protects the five forms of family wealth outlined below, and succession planning is a pivotal aspect of governance:

• Financial capital (money and assets)
• Human capital (the family members themselves and their skills and experience)
• Intellectual capital (knowledge, ideas and perspectives)
• Social capital (professional and social relationships, community involvement and philanthropy)
• Ethical capital (values, philosophies and responsible practices that improve the lives of others)

Imagine the succession plan as the roadmap that provides all necessary directions to reach the desired destination. It outlines specific roles and a timeline for training heirs to manage of all five forms of family wealth. Thoughtful succession planning also gives business stakeholders confidence about continued stability during times of transition and beyond, thereby increasing the family wealth enterprise’s resilience. Challenges will arise—including economic downturns and changes in the workforce and workplace—so it’s important to prepare for the unexpected.

The Elements of Succession Planning

The succession plan must specify ways to prepare heirs to be good stewards of wealth and enable them to understand their evolving roles and responsibilities. The ideal candidates will need to develop their financial literacy and business acumen, as well as leadership and decision-making skills.

Heirs can build financial literacy from a young age by managing their own expenses and then participating in the financial aspects of the family business. Understanding key financial concepts and practices provides a foundation to gain valuable workplace experience and develop business acumen. When heirs understand the finance function and the inner workings of a business, they can think strategically to identify risks and opportunities.

To develop their leadership capabilities, heirs must appreciate the importance of being accountable to others while holding others accountable as well—an especially delicate task when working with family members. Sound leadership requires emotional and social intelligence to communicate effectively, bearing in mind that some family members will receive and process information differently. Strong leadership skills are especially necessary within the business, and these will help heirs thrive in supervisory roles and gain buy-in from stakeholders.

To fill ownership and leadership roles, heirs need to develop their decision-making capabilities as well. They will have to weigh competing interests and make judicious decisions that yield the maximum benefits over the near term and long term. Drawing on leadership skills and business acumen enables heirs to make decisions more effectively. Ultimately, when identifying a successor, it is prudent to empower those who demonstrate a passion for the role and have the necessary skills to make a meaningful contribution.

“Before anything else, preparation is the key to success.” -Alexander Graham Bell

Succession Techniques

Succession planning should be rooted in an evaluation of the abilities and desires of those family members who are potentially in line for succession. Future family heirs will need education, training and business experience. Some heirs may not be interested in participating directly or may not have skills conducive to the family’s needs in this area. In some cases, extenuating circumstances (e.g., health issues, conflicting commitments, et al.) may also complicate having certain individuals directly involved in the succession plan.

Ultimately, some heirs may have active involvement while others have passive involvement—such as participating on the board but not engaging in day-to-day activities—so thorough planning and preparation are crucial.

Training and education for succession are key components of a sound plan and enable heirs to develop increasing levels of responsibility. These practices also limit overall risk to the family wealth enterprise by entrusting a specific set of duties to an heir, so they can demonstrate full competency before expanding the scope further. One way, for example, of enabling a family member to obtain this education is by completing an internship at the family business and then taking a position at another organization for a period of time prior to rejoining the family’s business in a permanent role.

An important aspect of family office governance is the family committee (also referred to as the family board or council), which comprises of core family members who review and execute key decisions. Within the family committee, heirs can serve as junior members who attend and observe before getting a voting role, so that they understand the process and responsibilities. It’s also helpful for heirs to have a service mentality in line with the family’s common philanthropic goals, and they can build this by participating in the family foundation, if one exists.

Younger family members can benefit from preparation for board positions as well, which includes receiving mentorship and formal board training. There are also benefits to outlining specific requirements for board participation. From a business standpoint, these steps could be comparable to the process for promoting an employee within the company, and heirs should be prepared to demonstrate a similar level of competence and accountability.

Critical Considerations for Ownership Transitions

Across all three circles of participation in the family wealth enterprise, there are four critical considerations to weigh carefully when transitioning ownership: communicating effectively, ensuring the proper fit, remaining flexible and establishing a new role for senior generations.

Overall, transparency regarding the plan and process helps to increase preparation and avoid conflict. Where necessary, communication can still be restricted on a need-to-know basis. From a timing perspective, different groups of stakeholders will need to be informed about relevant information depending on how aspects of the succession plan affect that group. These stakeholder groups may include family members, direct succession contenders and extend to key employees, crucial third-party professionals and the general public.  The communication strategy must account for the perceptions and reactions that could result. Effective communication and planning can minimize the potential for confusion or resentment. Especially within the family, soliciting input and acknowledging everyone’s viewpoints will help build consensus and prevent simmering discontent.

Ultimately, the most important factor is to select a successor who fits well in the role. While there is no definitive list of characteristics that describe an ideal successor, it’s best to have a combination of relevant experience, business acumen and emotional intelligence. These qualities help a successor address an array of challenges and build trust with key stakeholders.

The ideal leadership traits must be rooted in the family’s shared values, and they can include:

• Humility: Know what you don’t know and be willing to listen and learn.
• Accountability: Take responsibility for your decisions and hold others accountable.
• Maturity: Regardless of age, exercise good judgment and act in the best interests of the family and business.
• Integrity: Act in accordance with the family values, especially for difficult decisions.
• Diligence: Work hard, be engaged and lead by example.
• Cohesion: Be a good teammate, encourage collaboration and foster a shared culture.

As with any plan, flexibility is an important consideration. Remaining responsive to shifting circumstances or unexpected changes should be worked into the overall succession plan. For example, the person chosen as a successor may not be able to fill the role as expected for a range of reasons, such as an unforeseen change in personal obligations or health status. Scenario planning is an important aspect of preparing for a range of contingencies and responding accordingly.

Another critical aspect of planning is mapping out the new role for members of the older generation. They have significant knowledge to impart and are accustomed to holding influential positions, so a natural fit for them could be a board chair or head of the foundation, or both, if applicable. Correlated concerns include identifying any challenges and mitigating fear or resentment, which can come from internal conflict or frustration over a loss of control after decades of leadership. An outside facilitator who specializes in family dynamics can help identify and navigate these concerns in a constructive manner to ease the transition. It’s best to address such conflicts as soon as possible to avoid intervention after the transition.

Involuntary Succession: Preparing for the Unexpected

Unfortunately, some successions are not voluntary. Because there are many different considerations to weigh and significant planning required for a voluntary succession, the process can stall or hit a roadblock. This exposes the organization to greater risk, so it behooves all key stakeholders to make adequate preparations and guard against an involuntary succession, which could be caused by death, disability, the unanticipated sale of the business or other unexpected factors. Thorough preparation and scenario planning help alleviate the effects of an involuntary succession and maintain resilience during unforeseen occurrences.

The Path to Success

Succession will happen, so it’s important to plan accordingly— and well in advance—to achieve the desired outcome and maintain the family wealth enterprise. The plan should outline specific measures to educate heirs and have them gain experience with finances, leadership and decision making. Each type of succession across the family, business and ownership circles also needs to have its own distinct plan to ensure success, in combination with assessing the right fit for the role and communicating about this effectively.

Adaptability is a key aspect of succession planning, allowing the organization to adjust to unexpected occurrences without significant disruption. Ensuring members of the older generation have a new role to transition into, so that they can impart the value of their wisdom and experience can help to enable a smooth transition. Taking this proactive approach to succession planning positions the family, ownership and business for continued success, which will safeguard the family legacy for generations to come.

Succession Planning in 5 Steps

1. Determine how heirs will get education and experience with finances, leadership and decision making.
2. Assess and decide the best fit for the role.
3. Make a distinct succession plan for the family, business and ownership circles of participation.
4. Communicate the succession plan to all key stakeholders.
5. Establish a new role for members of the older generation.

The post How to Plan for Succession: Preserving, Protecting, and Passing on Wealth appeared first on Walter Shuffain.

Why Financial Dashboards Are a Game-Changer

Instead of flipping through reports to make sense of where your money is going, financial dashboards give you instant insights. They pull key financial data together and display it clearly—so you can make smarter decisions faster.

Here are some recent insights for financial dashboards:

• In 2024, an estimated 70% of financial dashboards used Artificial Intelligence and machine learning to provide predictive insights and automate trend analysis.
• Businesses that leverage financial dashboards are over three times more likely to make data-driven decisions that lead to higher growth rates.
• In 2025, the demand for business intelligence and analytics software is expected to rise significantly, reaching a market value of $33.3 billion as more businesses focus on data-driven financial decision-making.

How Dashboards Help Manage Finances with Ease

One of the most significant benefits of financial dashboards is that they make it easy to track income, expenses, and profitability—all in one place. Instead of guessing where your money is going, these dashboards break it all down, flagging any unusual spending patterns and helping you catch issues before they become significant problems.

Example: Say your expenses spike unexpectedly. Instead of scrambling to figure out why, a financial dashboard will highlight where the money is being spent so you can take action quickly. On the other hand, if a particular product or service is bringing in sizeable returns, you can see that instantly and allocate more resources to scale it up.

Real-Time Insights for Smarter Decision-Making

Traditional financial reports tell you what happened last month or quarter, but it’s often too late to make proactive changes by then. Financial dashboards give you real-time updates to determine your business’s current status. If sales are slowing down, you can quickly spot whether it’s due to seasonal changes, increased competition, or something else entirely. As a result, you can tweak your strategy to maximize future profit.

Planning for Growth Without the Guesswork

Financial dashboards aren’t just about managing today’s numbers; they also help you plan for the future. By comparing past trends with current performance, you can forecast revenue, assess when it’s time to expand, and prepare for potential challenges. When you need to apply for financing or attract investors, having clear financial insights from a well-structured dashboard can make all the difference in securing the proper support.

Key Features of Effective Financial Dashboards

For financial dashboards to be truly effective and provide valuable insights, they should be:

• Customizable: Every business is different, so your dashboard should focus on the financial metrics that matter most to you.
• Connected to Multiple Data Sources: Collecting data from accounting software, sales platforms, and operational systems ensures a complete financial picture.
• Real-Time and Automated: Automatic updates mean you’re always looking at the latest numbers, minimizing human error and saving time.
• Easy to Use: Dashboards should be intuitive, allowing users to explore data and uncover new insights without needing advanced technical skills.

Looking Ahead: The Future of Financial Dashboards

As financial dashboards continue to evolve, businesses that adopt these tools now will be in a stronger position to make proactive, data-driven decisions. The ability to see financial data clearly, make adjustments quickly, and plan confidently will be a game-changer for companies looking to grow and stay competitive.

Financial dashboards aren’t just about numbers—they’re about making accounting more manageable, freeing time, and giving businesses the clarity they need to grow confidently. Whether it’s keeping expenses in check, forecasting future revenue, or just having peace of mind about your financial health, these tools put you in control of your business’s success.

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Without a flexible approach, you end up making decisions based on old data, leading to cash flow surprises, missed opportunities, and constant backtracking to revise numbers that no longer make sense. That’s where rolling forecasts come in. Essential factors like customer acquisition rates, sales figures, and operating expenses should serve as the backbone of your rolling forecast.

A rolling forecast is a financial plan that keeps moving forward. Rolling forecasts update regularly—usually every month or quarter—so your business is always working with the latest financial data. As one period ends, another one is added, ensuring you always have a forward-looking plan in place.

The Future of Business Planning

Rolling forecasts are changing the way businesses plan for the future. Instead of locking into a budget that may not hold up, companies that embrace dynamic budgeting are staying flexible, making strategic financial moves, and keeping their accounting practices stress-free.

If you’re tired of revising budgets and want an easier way to manage your business’s finances, switching to rolling forecasts might be one of the best decisions you can make. It’s not just about keeping up—it’s about staying ahead.

How to Make the Switch to Rolling Forecasts

Switching to a rolling forecast system doesn’t have to be complicated. Here’s how to start:

Use Financial Planning Software

Tools like cloud-based accounting software such as NetSuite or ePROMIS can automate forecasts, saving time and reducing errors. With rolling forecasts, updates happen automatically as new data comes in, eliminating the need for constant budget overhauls. This ensures your financial plan stays current and accurate with minimal manual effort.

Update Forecasts Regularly

Decide whether you want to update forecasts monthly, quarterly, or at another interval that makes sense for your business. Unlike static budgets that rely on initial assumptions, rolling forecasts pull in real-time financial data. This means your numbers are always up to date, leading to more precise planning and better cash flow management.

Focus on the Right Metrics

Track what matters—whether it’s revenue, operating costs, or cash flow—to make your forecasts as useful as possible. A clear, always-updated forecast helps businesses plan for payroll, investments, and taxes while avoiding cash crunches and unexpected financial surprises.

Get Input from Your Team

Work with finance, sales, and operations teams to make sure forecasts reflect the reality of your business. Rolling forecasts allow for smarter, faster business decisions by continuously adjusting plans based on actual performance. Instead of waiting for a year-end budget review, your team can pivot quickly—whether that means scaling up during a boom or tightening expenses before they become problematic.

Final Thoughts

By making these adjustments, businesses can reduce the stress of year-end reconciliations and compliance tasks. With financial data updated throughout the year, reporting becomes much smoother, saving time and effort for your accounting team.

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In her new role, Debbie will continue to provide tax and consulting expertise to clients in various industries while taking on expanded leadership responsibilities within the firm.  

Debbie joined Walter Shuffain in 2012 as a Supervisor in the Tax Department. She has demonstrated technical expertise, a commitment to client success, and to fostering professional growth within the firm.  

“We are thrilled to recognize Debbie’s dedication and hard work with this well-deserved promotion,” said Jonathan Yorks, Managing Partner of the firm. She has consistently gone above and beyond to support our clients and our team, and we are excited to see her continued contributions as a Manager,” said Yorks. 

Debbie is a member of the Massachusetts Society of CPAs and Walter Shuffain’s corporate social responsibility committee.  

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Evaluating and Cleaning Up Accounting Practices and Records

Evaluating the state of a company’s current accounting function is not a routine task; it is a strategic necessity. Insights learned during analysis and evaluation can serve as the foundation for financial reports presented to potential buyers and investors. A thorough assessment of existing financial practices can also help ensure compliance with current regulations, provide comparability to industry metrics, and demonstrate a firm grasp of the company’s financial and operational performance.

Common issues that may be revealed during the evaluation and due diligence stages of the transaction include the following:

• • Inconsistent application of accounting policies.
  • Incomplete financial records.
  • Lack of consistent reconciliations of supporting data to financial statements.
  • Inaccurate financial statements.
  • Weak management of working capital.
  • Poor cost and debt management.
  • Inaccurate asset valuation.
  • Noncompliance with U.S. GAAP, IFRS, and regulatory standards.

Overlooking these issues or failing to correct them can delay or even derail a potential M&A transaction. However, the accounting strategies described below can help increase confidence in a company’s finances, lessen overall risks, and decrease the potential for value erosion and surprises.

Preparing Clear, Accurate Financial Reporting

Accurate financial reports serve as the foundation upon which investors base their decisions, providing them with a comprehensive understanding of the company’s financial health and performance. By presenting financial statements that are both precise and transparent, sellers can effectively communicate the true value of their business. This transparency not only aids in building trust with potential buyers and investors but also can position the company as a credible and reliable investment opportunity. Meeting investor expectations through meticulous reporting can significantly enhance the attractiveness of the business, ultimately facilitating a smoother transaction process.

Conducting Diligence

A comprehensive diligence process is essential when evaluating business performance during a sell-side transaction. This process typically begins with gathering and organizing all relevant financial documents, including income statements, balance sheets, and cash flow statements. A detailed analysis of these documents can enable the identification of trends, anomalies, and areas that require further investigation. During due diligence, it is important to evaluate the company’s internal controls and compliance, helping to ensure that the company is operating within the appropriate framework and adhering to industry best practices.

To properly assess the overall performance and potential risks associated with the business during due diligence, several key areas of focus may be prioritized:

• Financial performance may be scrutinized to understand revenue streams and revenue recognition practices, profitability, and cost structures.
• Operational efficiency may be evaluated for the effectiveness of the company’s processes and the management team’s capabilities.
• Market position and competitive landscape may be analyzed to gauge the company’s growth potential and strategic advantages.

The diligence process provides valuable insights that can help decision-makers identify strengths, weaknesses, and opportunities within the company.

Adjusting Accounting Practices

Whether to adjust accounting practices or not sometimes depends on the needs of the acquiring entity. For example, a seller might use cash accounting methods, but a potential buyer may prefer accrual accounting, particularly if revenue recognition is accelerated under cash accounting methods.

Normalizing financial statements to reflect the true economic performance of the company may be necessary. In some cases, this may require removing non-recurring expenses to present a clearer picture of sustainable earnings. Sellers might need to adjust revenue recognition practices to ensure compliance with accounting standards, which can be particularly challenging for companies with complex revenue streams or long-term contracts. These and similar adjustments may be crucial to the transaction by providing a more accurate representation of the company’s financial health, historical performance, and future earnings potential.

The technical complexity of certain adjustments, such as those related to revenue recognition or fair value measurements, may necessitate the involvement of external accounting experts. This is especially true for companies that lack the resources or experience to tackle the workload or technical accounting burden of a sell-side accounting diligence process in addition to their normal day-to-day tasks. Experienced financial advisors or consultants can provide valuable guidance and support in such situations. Companies may proactively address accounting challenges before a transaction is even in the planning stages because doing so can enhance a company’s financial reporting and build greater trust with potential investors.

Bolstering the Accounting Team

A robust accounting team becomes increasingly vital while preparing for and during a sell-side transaction, yet companies often lack the resources needed to meet the heightened reporting and diligence requirements. During rigorous scrutiny from potential buyers and investors, the company’s accounting team must be equipped to handle complex financial analyses, as well as identify and address any necessary adjustments to the company’s current and historical figures. A seasoned team that is prepared for sell-side transaction accounting not only aids in presenting the company in the best possible light but also helps identify and mitigate potential risks that could arise.

Companies may elect to bring in additional resources to manage day-to-day accounting tasks, allowing the core team to focus on the more critical aspects of the transaction process. Conversely, engaging external consultants may bring knowledge and experience — at both accounting and industry levels — that can help the company navigate complex accounting issues and confirm compliance with relevant standards.

Timing is everything. Management teams often wait until they are ready to begin a process to self-reflect on their team and processes, causing a costly rush to improve financial reporting and accounting capabilities. Proactive focus on the aforementioned aspects of its accounting team allows a company to be prepared to take advantage of opportunistic market conditions. Bolstering the accounting team with both internal and external resources can help a company involved in a sell-side transaction manage the increased demands on its accounting team.

Seizing Opportunities Amidst Preparation

Attracting Investment

Companies that have successfully showcased their financial health through detailed and precise reporting often find themselves in a stronger position to attract competitive bids. Accurate financial reports offer a more transparent view of the company’s current and historical performance, providing reliable data that informs potential buyers and investors.

Presenting clean financials prepared after comprehensive due diligence can potentially enhance the company’s valuation. Prospective buyers can assess the true value of the business without the fear of hidden liabilities, financial discrepancies, or other unpleasant surprises. Placing a strategic focus on transparency and accuracy may transform the sell-side process into a significant opportunity for growth and success.

Written by Brian Black, Osmar McIntosch and Patrick Tye. Copyright © 2025 BDO USA, P.C. All rights reserved. www.bdo.com

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