Bank needs financials for construction company...new client

Hi All -

New client...great client...construction company...fun to work with and know their business, growing, etc.

However, they out grew their last accountant who was basically just putting together necessary records for tax purposes only - cash basis, s-corp, <<$10MM in revenue.

That said, I am now tasked with getting financials for the bank for 2016. I know enough to be dangerous re. GAAP and percentage of completion (I'd need to get some research materials to make sure I'm doing it right), but I want to make sure I'm not missing anything.

I'm not engaged to compile/review/audit, and I'd like to isssue under SSARS 21, Sec. 70

Here are my main concerns:

-If I switch to GAAP this year, I assume I'd need a P&L line for change in accounting methods, or...would I make BOY equity what it would have been under GAAP last year? (It seems to me that the BOY equity should tie to their last set of financials, aka the 1120S)

-Or...would it be more clean and serene to just do modified cash basis this year ('16), since the records from 12/31/15 regarding the actual % of completion are going to be fairly scant. (i.e. fairly estimated.)

What do you guys think? Thanks much for the consult. It's good to be back in the game!

Do you know for sure the bank wants GAAP financials? Just issue tax-basis financials.

Now...THAT...is a good question...I'll find out.

Bank would prefer accrual...thoughts?

Beyond the immediate issue;
Will the client need financials for bonding purposes? If so, GAAP would be important.

Update: we're going GAAP. Preparation under SSARS ASC 70. Thanks for the input. The only thing I still have to figure out is the change in accounting method. It seems like the easiest way is to just figure out the BOY B/S under GAAP compare the P&L difference to the BOY B/S under cash and net the difference to the change. Right?