Issuance of EBITDA, other limited facts and figures

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#1
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I have a client that wants us to prepare their EBITDA, Gross Revenues, and officer compensation on a spreadsheet for them to present to a potential buyer.

No financial statements are being issued in correlation with these figures, but we do have engagement letters for a few of those years for Prepared Financial Statements.

Does anyone know what I have to do here? I know how to get the figures, it's just making sure I am not crossing some line if this is considered a "prepared financial statement" somehow. I am probably being over cautious here, but I would rather be sure than sorry.

Thanks.
 

#2
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If this helps, all of the information used to prepare this project are being taken from the tax returns, except for 2020, which is not finished yet. We do not have prepared engagement for 2020.
 

#3
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Knowing that the information will be presented to a third-party, I would treat it as an agreed-upon procedure attest engagement. My understanding is that if special projects or financial statements, in conjunction with a business valuation (which, in this case, maybe inferred without the explicit language), it then becomes an attest engagement.

However, if the client prefers for cost, speed or other reasons, and you make clear that it is not to be used for business valuation, you could treat it as a non-attest financial statement preparation (AR-C 70) with a full set of financial statements, rather than those specific numbers in isolation.

Yes, get a new engagement letter and label accordingly, in either case.
 

#4
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Taxkeeper,
Thank you for your help. Do you have a source for your suggestion?

Thanks,
 

#5
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I read AR-70 as you are not allowed to issue prepared financials when you are also providing business valuation services.
 


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