Why do the numbers go here instead of there? That’s the basis of accounting theory...understanding why things work the way they do in accounting.

The goal? Fairness. Clarity. Depth of disclosure.

But wait, wait, wait...isn’t accounting about numbers? Yes, so many numbers. But the theory is largely about regulations and new standards…as if numbers weren’t mind-numbing enough.

Related or Semi-related Video

Finance: What is Regulation A?7 Views

00:00

Finance allah shmoop what is regulation eh Don't worry about

00:08

a thing because every little thing going to be all

00:11

right Ok Not reggae greg a our apologies for singing

00:17

there too mr marley's ghost Alright Well regulation a is

00:21

like security sale Light diet jenny craig Well specifically a

00:26

regulation A offering is one that carries a total notional

00:30

value of less than five million bucks worth of securities

00:34

as sold within a one year time frame All right

00:36

what is this one year thing It means that the

00:38

total dollar amount of securities sold for that given issuer

00:43

of them within a year would fall under the easy

00:46

breezy regulatory world of rig a If it had a

00:50

five sales of a million dollars of dead or equity

00:53

or less within one year if it had a sixth

00:57

sale meaning it would push it over Five million told

01:00

raise that year Then it would not fall under the

01:02

wreg a system and it would have to do an

01:05

enormous number of somersaults as if it was doing a

01:07

multimillion or billion dollar offering to the massive public There

01:12

are other little gotsch is inside of the reggae world

01:15

Like the company does not have to provide fancy securities

01:19

and exchange act reports until it has mohr than five

01:22

hundred shareholders and more than ten million box and assets

01:25

Why is reggae even a thing paperwork and small companies

01:31

doing offerings all the time with such a small offering

01:33

size The sec doesn't make you spreadem or you know

01:37

turn your head and cough nor does it take blood

01:40

urine or other samples love things when inspecting the legitimacy

01:44

of your offering feeling the need to keep myriad lawyers

01:48

employed Of course reggae grew more complex over time One

01:52

complexity revolves around the two tears under which reggae types

01:56

of filings must live Tier one allows for a rig

01:59

a style a simple offering to flex or expand to

02:03

be twenty million dollars in cap in one year with

02:07

filings that have to conform to the standards and that

02:10

are subject to their complaint list The good news for

02:12

the company Well they only have to do this upon

02:15

the offering not every quarter Then we have a tear

02:18

to flavor of a reggae offering In this somewhat more

02:21

complex twist companies may sell upto fifty million dollars in

02:25

securities in a one year period this sales also quickly

02:28

vetted by the sec but it doesn't have to be

02:31

vetted by state regulators and an army of lawyers And

02:35

unlike tier one into issuers well it must report financial

02:38

status regularly as in quarterly almost as if the company

02:42

is already a public corporation That's about it Long story

02:45

short reggae is an exemption for the sale of securities

02:49

that an exemption from mountains and mountains of paperwork and

02:53

filing an expense in raising money Reggae was basically a

02:57

nod to small startup e kinds of companies so that

03:01

they didn't have to spend half the money they raised

03:03

on lawyers and filing things and stuff for government bureaucrats

03:08

Tio no Stare at all right Well in parting we'd

03:11

like to thank our kindly sponsors at nyquil z z

03:13

z for their help and cooperation in producing this fine 00:03:17.37 --> [endTime] regulation A video

Up Next

Finance: What is GAAP?
21 Views

GAAP is an acronym for Generally Accepted Accounting Practices. In order to remove as much subjectivity as possible, accounting policy bodies, such...

Finance: What is Reg G?
5 Views

What is reg G? No, it's not an up-and-coming rap star...though we know what our rapper name is now. Hit play to find out.

Finance: What is piggyback registration?
2 Views

Piggyback registration occurs when a company's newly printed shares are sold to the public, and the existing shares "piggyback" onto them.

Finance: What is shelf registration?
3 Views

A shelf registration is a kind of public offering where banks and other institutions can offer new securities in companies without going through an...

Find other enlightening terms in Shmoop Finance Genius Bar(f)