Background
Our client, a start-up in the consumer auto leasing industry, faced significant challenges as they prepared for their first audit. They required technical accounting guidance and support in multiple areas, including accounting for EV leases, equity compensation, ASC 606 revenue recognition, and development costs for their unique mobile-only customer platform.
Solution
We collaborated closely with the client’s executives and department leaders to implement a comprehensive accounting solution that addressed their immediate needs and provided a roadmap for future growth. Our approach included:
- Equity Compensation: Partnering with Accounting and HR to implement Carta (eShares), a comprehensive equity management solution. This eliminated the client’s reliance on Excel and enabled them to generate audit-friendly reports efficiently.
- Software Development Costs: Developing a cost allocation model based on the Technology Department’s agile development processes. This model aligned with ASC 350-40, allowing the company to capitalize expenses and recognize the long-term value of their innovative consumer platform.
- Ongoing Support: Providing guidance on accounting for their growing fleet of EVs and other areas relevant to their expanding auto subscription service.
Results
Through our collaborative efforts, the client successfully met all audit requirements, leading to the completion of their first audit. Our work extended beyond the immediate audit needs, as we also offered strategic advice on accounting for their growing EV fleet and other aspects related to their nationwide expansion of the auto subscription service. This guidance is designed to empower the client as they continue to evolve and grow in the future.
