This topic contains concepts you should understand before you start working with historical statements.

Note: This documentation deals with what you need to know in order to use the application appropriately and efficiently; if you need information about accounting practices and concepts, please refer to an accounting reference book.

View Mode and Edit Mode

The Historical Statement has two modes:

• View mode: The statement is read-only. No modifications can be made to the statement setup or data; therefore, many options (links at the top of the spreadsheet, action menu options, and right-click options) are not visible. You can still use other functions, such as running reports and exporting the statement to Microsoft Excel.

• Edit mode: The statement can be edited. Several options that are not visible when the statement is in view mode are now accessible. To have the statement be in Edit mode, ensure that you select the Edit icon from the main client record.

Note:  Only one user can have a client’s statement open in edit mode at a time. When a user has a client’s historical statement open in edit mode, the statement becomes locked, which means that all other users can access the statement in view mode only until the first user exits the statement.

When you access the Historical Statement, the statement will open in edit mode unless the statement is locked by another user. If the statement is locked, you’ll see a message telling you it is locked and by whom, and the page will open in view mode.

The title bar of the spreadsheet indicates in which mode the Historical Statement is operating.

Chart of Accounts

The spreadsheet shows a client's chart of accounts — for the balance sheet, income statement, and reconciliation — that are relevant to the client's particular industry. For each individual period in each individual client record, you can adjust the account titles (that is, rename the accounts), remap the way in which an account contributes to cash flow, and add detail accounts to expand a single account into subcategories.

Dollar Units

When first setting up a client's spreadsheet, you specify the dollar unit (statement unit) in which to spread the data. Dollar units refers to the number of assumed digits — whether the numbers entered in the cells are actual dollar figures, figures in the thousands (with the last three zeros dropped off), figures in the millions (with the last six zeros dropped off), and so on. The spreadsheet displays the chosen dollar unit in the upper-left corner of the spreadsheet. You can change the dollar unit after the spreadsheet has been set up.

Periods

A single historical spreadsheet may display up to six periods but can store an unlimited amount; the display is limited to six for the sake of performance. Typically, you need at least three periods to analyze trends clearly. You can display more periods on a report.

For each period, you record the currency type, period length, quality rating, prior period, analyst, and preparer. All periods within a single client record (spreadsheet), however, must be spread in the same industry, using the same dollar units.

Primary Cash Flow Report

For each industry, one type of cash flow report is designated the primary cash flow report for that industry. For General & Middle Market, the default primary cash flow report is the UCA Cash Flow report. This is the cash flow that initially comes up when entered in Custom. You can always switch to another cash flow.

Quality of Financial Data

You can record the quality of data separately for each Historical or Currency period in a spreadsheet, using the following values:

• Other: The quality rating does not fall into the existing categories, or the rating cannot be determined.

• Proforma: Proforma data consists of projected figures (for budgeted periods or projections).

• Unqualified: The audit has been done in accordance with GAAS , and the statements have been prepared in accordance with GAAP . Unqualified data is the most reliable type to analyze.

• Qualified: Some sort of exception is attached to the data, or certain information has not been verified or prepared.

• Disclaimer: The auditor has not expressed an opinion, due to a lack of information.

• Review: The data has been reviewed by outside accountants without an audit but with enough knowledge to indicate that GAAP have been employed to make the statements reasonable. In general, this rating does not qualify as a true audit because of the limited assurance that the statement has been prepared in accordance with GAAP.

• Compiled: The data was compiled from the client's books without an audit. The CPA has expressed no opinion about the accuracy.

• Adverse: Statements were prepared and/or the audit was done in a manner so significantly removed from GAAP that not even a qualified opinion can be offered.

• Company Prepared: The client internally prepared the financial statements. Client preparation indicates a lack of independent and impartial verifications.

• Interim: The financial data is for a period of fewer than 12 months, or is for a period of 12 months but is not representative of the fiscal-year period.

• Tax: The data is in the form of cash receipts and disbursements rather than accrued revenues and expenses.

• Draft: The data is from an unverified audit compilation.

• Projection: The data is a projection of future revenue and expenditures.

• Undefined:  The quality of the data is not currently defined.

Rounding

The application rounds fractional values that are greater than or equal to 0.5 up to the next whole value; fractional values less than 0.5 are rounded down. For example, 3.5 rounds up to 4, and 3.4 rounds down to 3. Note that rounding may result in imbalances.

When the application rounds a value, it automatically creates a cell memo indicating the original value.

Note: If different exchange rates are used for the periods in a spreadsheet, the net worth reconciliation will not flow properly from one period to the next.

Type of Financial Data

You have three choices for designating the type of financial data in a spreadsheet period:

• Historical: The data (which is assumed to be in U.S. dollars) comes from prepared financial statements and represents the client's actual performance. Historical is the default data type.

• Currency: The currency other than the primary of the spread.

• Budgeted: The data is a projection of future figures. See Creating a Projection for more information.

Each period in a spreadsheet can be any of the three types. You designate the type when setting up the period.

Historical spreadsheet refers to the main spreadsheet, which can contain all three types, to distinguish this spreadsheet from the projected statement and the covenant spreadsheet.