The Tax Cuts and Jobs Act stopped companies deducting research and experimental costs. It required capitalisation and amortisation instead, for tax years beginning after December 31, 2021. Domestic costs amortised over five years and foreign costs over fifteen. The One Big Beautiful Bill Act, signed July 4, 2025, created IRC Section 174A. It permanently restored immediate expensing of domestic research costs for tax years beginning after December 31, 2024. Foreign research expenditures remain subject to fifteen-year amortisation, so companies now need to track domestic and offshore research separately.

In most cases yes, through one of two routes. Any taxpayer may elect to deduct the remaining unamortised domestic research costs from those years. That election runs either in full in that first year or ratably across it and the following year. Separately, small taxpayers meeting the gross receipts test under Section 448(c) may amend their 2022, 2023, and 2024 returns directly. Which route delivers more value depends on your taxable income and loss position. Deductions generally beat net operating losses here, because post-2017 NOLs only offset 80 percent of taxable income.

The federal research credit under IRC Section 41 covers qualified research expenses: wages, supplies, and contract research. Many states offer their own credit on top. Qualified small businesses can apply a portion of the federal credit against payroll taxes rather than income tax. That delivers cash before a company turns profitable. Section 280C applies again for tax years beginning after December 31, 2024. You either claim the full credit and reduce the Section 174A deduction, or make the 280C election and take a reduced credit. Modelling both is part of the work.

Life sciences contracts rarely look like product sales. Collaboration agreements, upfront payments, development milestones, licensing arrangements, and royalties all carry variable consideration under ASC 606. The work sits in identifying the separate performance obligations, allocating the transaction price across them, and deciding when control transfers. Companies preparing for an IPO or an acquisition need this settled early. Restating revenue during diligence costs money and damages credibility at exactly the wrong moment.

Under ASC 718, equity awards are valued at grant date and expensed over the vesting period, with disclosure of assumptions and unrecognised cost. Option pricing models handle standard grants, while performance and market-condition awards need more involved approaches. Because cash-constrained biotechs pay heavily in equity, this is usually a material expense rather than a footnote. Strike pricing also depends on a supportable valuation of the common stock, which auditors and the SEC examine closely ahead of a listing.

Several. Inventory reserves and obsolescence matter once manufacturing starts, particularly where product has a shelf life or a regulatory approval could change. Clinical trial costs raise questions about accrual timing and what may be capitalised. Royalty and licensing arrangements need their own accounting. Companies operating across borders face transfer pricing on intellectual property. Long development cycles and heavy capital requirements also make cash flow forecasting and covenant compliance harder than in most sectors.

Months before fieldwork, and earlier for a first audit or a pre-IPO company. The areas that take time are revenue recognition on collaboration agreements, stock compensation valuation, research cost treatment, internal control documentation, and obtaining SOC reports from key vendors. Waiting until the auditor asks turns a planned process into a scramble. Bringing in a specialist to run the preparation usually shortens the audit itself.

SEC issuers generally need audits performed under PCAOB standards, and a registration statement typically carries several years of them. Readiness also covers strengthened internal controls and board and audit committee governance. Add the financial sections of the S-1, including management discussion and analysis, plus stock compensation analysis and ASC 606 compliance across existing agreements. Most companies begin twelve to twenty-four months ahead. GreenGrowth CPAs is registered with the Public Company Accounting Oversight Board, so this work stays with one firm rather than transferring mid-process.

Generally once the plan reaches 100 or more participants with account balances at the start of the plan year. At that point the Form 5500 must carry a report from an independent qualified public accountant. The 80-120 participant rule gives one exception: a plan sitting between 80 and 120 participants may file in the same category it used the previous year. Fast-growing companies cross the threshold through hiring without anyone flagging it. GreenGrowth CPAs is a member of the AICPA Employee Benefit Plan Audit Quality Center.