Follow Ryan Facebook
Email Ryan Email
Financial
Mar 12, 2019

Commitments and Contingencies

Sponsored Content provided by Ryan Skuce - Partner, Earney & Company, LLP

Financial statements provide a picture, a snapshot, of the state of your organization at one point in time – generally your fiscal year end – and how well you managed your funds over that fiscal year.
 
But that doesn’t complete the picture.
 
It is also important to inform the readers of your financial statements – your grantors, your lenders, your members and donors – about the future of your organization, in particular the financial implications of, you guessed it – commitments and contingencies.
 
Commitments are those obligations your organization is legally bound to, whether short-term or long-term, such as: leases of property or equipment; contracts for future purchases; or unused letters of credit or obligations to reduce debt.
 
Disclosing the nature, amount and terms and conditions of these commitments completes the picture of your organization’s cash position and potential liabilities. You may be planning a capital improvement but haven’t broken ground yet. You’ve entered into an agreement with the builder and that commitment should be disclosed to your readers.
 
Contingencies may or may not become liabilities. They are dependent on some uncertain future event, such as: risk of loss or damage to property; actual or possible claims; or pending or threatened litigation.
 
While you can’t predict the future and aren’t expected to account for any and all possible events, issues known to management at the time the financial statements are prepared should be disclosed. Your CPA will need to know, from you or your legal representative, the probability and potential gain or loss in order to properly disclose the contingency. A contingency may or may not appear on your balance sheet depending on the conditions, the amount and the probability.
 
Management will be preparing for the commitments and contingencies in the ordinary course of budgeting, cash management and overall strategic planning. It is equally important for the readers of your financial statements to be informed about those possible and/or probably future events. Contact your CPA for more details and advice regarding your specific situation.
 
Ryan Skuce joined Earney & Company, L.L.P. in 2003, and became a partner in November 2013. He works extensively with physicians, medical practices, and large medical groups. Ryan has experience in accounting and tax services including financial reporting and analysis, technical support, cash flow planning, physician compensation strategies, and medical practice strategic planning. He also has experience in the areas of accounting and tax for a variety of for profit and nonprofit clients. Ryan is currently a member of the American Institute of Certified Public Accountants (AICPA) and the North Carolina Association of Certified Public Accountants (NCACPA). Ryan works with his clients on evaluating operational and technical issues. He provides back-office accounting support, and recommends and assists in the implementation of ideas to cut overhead costs and streamline operations. With an in-depth knowledge of existing and proposed tax laws, Ryan often advises companies on tax deferment or savings through proactive structuring of transactions. He also assists his clients with Internal Revenue Service audits. He received his Masters of Science in Accountancy from UNC-Wilmington and resides in Wilmington, where he enjoys playing hockey with a local team.

Ecolarge 1016184145
Ico insights

INSIGHTS

SPONSORS' CONTENT
Michaelhiggins 41019104338

Pre-Planning Essentials For The Frequent Traveler

Michael Higgins - Dignity Memorial
Chris coudriet

Sewer And Water Along 421 Creates Corridor Primed For Growth And New Jobs

Chris Coudriet - New Hanover County Government
Natalieenglish 3301715113

Advocacy: The Heart of the Chamber

Natalie English - Wilmington Chamber of Commerce

Trending News

PPD To Offer 60M Shares In Initial Public Offering

Christina Haley O'Neal - Jan 27, 2020

In The Current Issue

A Matter Of School Days For Tourism

Although the school calendar is staying the same for now for New Hanover County schools, it’s an ongoing issue that tourism and educators gr...


Packaged For Generations

Family firm Atlantic Packaging is putting the final touches on its newly expanded headquarters and opening a new location this month. ...


Info Junkie: Zane S. Bennett

Zane Bennett, executive director of Plantation Village, shares his top info and tech picks....

Book On Business

The 2019 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2019 Health Care Heroes
August 26, 2019 Power Breakfast: A Healthy Sale?
2019 WILMA Leadership Accelerator
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`