I have two specific
experiences of working with US-quoted companies, Ultralife Batteries (UK) Ltd and Bookham Technology plc. In addition I have helped
Sainsbury's IT procurement team find their way through US revenue recognition
rules (SOP 97-2, SFAC 5 and SAB 101). The main challenges that I found with
these companies were as follows:
·
using US-familiar terms when speaking with
US executives, eg inventory and not stock,
receivables rather than debtors. Nowadays, the risk of misunderstanding terms
is diminished by common terms usage between US GAAP and International Financial
Accounting Standards (IFRS).
·
explaining
business concepts that are different (UK business interruption insurance is
fundamentally different to the US version as is the UK's ability to impose
non-compete agreements on existing staff contracts for when they leave
employment)
·
certain,
but not many accounting policy differences, such as deferred tax, different tax
consequences concerning capitalisation of loans, the tax treatment of
distributions and the tax consequences of transfer pricing goods bought from
the US for onward sale into the European Union
·
the
accounting treatment of transactions that were not covered by specific US
Generally Accepted Accounting Practice, notably the treatment of assets
destroyed in Ultralife
Batteries' 3 fires and the associated insurance proceeds
·
the
implementation of internal controls and procedures to ensure that the business
did not have compliance issues over revenue recognition (US accounting standard
FASB 5), particularly at Bookham
Technology and in support of procurement's negotiations with US quoted
software companies at Sainsbury's
· a US owner making a public offering and making representations about the UK company in its 10Q and 10K returns. I was responsible for writing those aspects of those reports relating to the UK and of the 1998 public offering (Ultralife
Batteries).