Past Practices in Accordance with GAAP
A. Vincent Biemans, Gerald M. Hansen · 2017
This chapter explores the common basis of past practices in accordance with GAAP for calculating the net working capital as of the closing date. It discusses the impact of management judgment and the documentation thereof as well as the interpretation of management judgment by the accounting arbitrator. Also discussed are various complications of utilizing past practices, the consequences of GAAP violations, and potential opportunities for mitigation.