Wiley Practitioner's Guide to GAAS 2013: Covering all SASs, SSAEs, SSARSs, and Interpretations

AR 120: Compilation of Pro Forma Financial Information

EFFECTIVE DATE AND APPLICABILITY

Original Pronouncement	Statements on Standards for Accounting and Review Services (SSARSs) 14, 17
Effective Date	This statement currently is effective.
Applicability	When an accountant is engaged to compile or issue a compilation report on pro forma financial information.

OBJECTIVES OF AR SECTION 120

This section established standards for performing a compilation of pro forma financial information. A compilation of pro forma financial information is limited to presenting financial information that is the representation of management without undertaking to express any assurance on that information.

Entities issue pro forma information to show what the significant effects on historical financial information might have been had a consummated or proposed transaction or event occurred at an earlier date—for example, a business combination or the disposal of a portion of the business.

FUNDAMENTAL REQUIREMENTS

General Guidance

Reporting Obligation

An accountant may prepare or assist in the preparation of pro forma financial information and submitting such a preparation to management without the issuance of a compilation report, unless the accountant has been engaged to perform a compilation. However, in deciding whether to issue a compilation report, the accountant should consider how such a presentation of pro forma financial information will be used. If the accountant believes that he or ...