White Nelson Diehl Evans is dedicated to providing high quality, client focused tax, financial accounting and advisory services to assist our many customers in the retail sector:

  • Clothing and Apparel
  • Building Materials and Supplies
  • Groceries / Markets
  • Convenience Stores
  • Furniture
  • Electronics
  • Lumber
  • Specialty Stores
  • Sporting Goods
  • Restaurants
  • Fuel / Gasoline
New Standards in Real Estate Accounting

In 2016, the Financial Accounting Standards Board (FASB) released a significant pronouncement related to the accounting for leases. This change applies to nonpublic business entities beginning in 2020 and will have a major impact on commercial tenants including retailers.

Under current rules, real estate leases are not reported on the balance sheet. Consequently, leases are not treated as assets or liabilities but only as an expense. Upon adoption of the new standards, a real estate tenant with a lease greater than one year would be required to include the lease as both an asset and liability on the balance sheet.

Specifically, lessees will be required to recognize the lease liability, which is a lessee‘s obligation to make lease payments, measured on a discounted basis; and a right-of-use asset, which represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

For tenants, including this liability on their balance sheet may have implications on their compliance with debt covenants and could increase the cost of borrowing. In addition, this requirement places another accounting burden in terms of time and resources to review and account for such leases. To avoid reporting requirements, shorter lease term may be considered. These rules may also impact the types of rent, fixed rent, percentage rent and CAM. The new rules may allow a tenant to treat each expenditures differently and account for only the fixed rent obligations.

White Nelson Diehl Evans can help proactively guide you through these changes and the impact they will have on your financial statements and your business.

Inventory Controls and Costing

For retailers, an effective inventory system can contribute significant dollars to the bottom line. Shortages, theft, excess inventory, obsolete inventory and unproductive inventory are all a drag on company profits. The best inventory systems can be costly and capital intensive with integration to production and accounting systems, bar coding, invoicing, reorder points as well as providing a range of reports and analytics.

Given the importance of inventory controls and costing, this is a key management concern and if it isn’t, the impact will reflect in the company financial performance. Questions such as how many product SKUs to offer, how much inventory to maintain, whether to focus on fast moving products at the expense of a broader range of products are just a few of the critical decisions management will make with respect to inventory. There are several ways to more effectively control inventory thereby reducing overall costs. Using demand analytics to establish patterns will help identify trends and thereby improve forecasting.

White Nelson Diehl Evans has assisted many retailers over the last 60 years, to help them take advantage of growing trends and implementation of strong internal controls and systems. We offer innovative thought leadership on all issues facing companies in this sector.

Perspectives
annual govt seminar wnde

2017 Government Tax Seminars

10/06/17

White Nelson Diehl Evans LLP is pleased to present its annual Government Tax Seminars.  This program has been well attended by local government finance professionals throughout...

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New Audit Manager: Junaid Hassam

10/03/17

Junaid Hassam, CPA, has joined WNDE as a new audit manager.  His areas of expertise include audits, reviews and compilations.  Industries with which he has worked include mining, oil & gas,...

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Tax Benefits of Qualifying as a Real Estate Professional

9/22/17

It is not easy to qualify as a real estate professional.  However, if you do qualify as a real estate professional you are entitled to an income tax treatment that may benefit you. Tax Benefits...

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Tax Planning Guide

At White Nelson Diehl Evans, we know how difficult it is to stay ahead of the complex and dynamic tax laws. From new standards changing revenue recognition rules to the impact of the Affordable Care Act, our goal is to help our clients stay in front of tax issues that impact your bottom line. To help in this effort, we have put together a comprehensive tax-planning guide and it’s available to download for free.

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Partner Testimonial

“The retail industry has long been part of the fabric of WNDE. We serve retailers ranging from single store operations to large chains with nearly 200 locations. We recognize the unique challenges faced by retailers, and strive to deliver audit, tax and advisory services to help them improve store by store results.”

Sean Thorstenson Tax Partner