A development stage entity is one that devotes substantially all of its efforts to establishing a new business and for which (a) planned principal operations have not commenced or (b) planned principal operations have commenced, but have produced no significant revenue. For example, many start-ups or even long-lived organizations that have not yet begun their principal operations or do not have significant revenue would be identified as development stage entities.
Current Generally Accepted Accounting Principles (GAAP) require a development stage entity to present the same basic financial statements and apply the same recognition and measurement rules as established companies. In addition, GAAP requires a development stage entity to present inception-to-date information about income statement line items, cash flows, and equity transactions.
Keywords for this news article include: Banking and Finance, Finance and Investment, Financial Service Companies,
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