development stage enterprise

A business whose primary functions center on launching itself, and which meets one of the following criteria: (1) the intended main operations have not begun, or (2) main operations have begun, but there has been no major income. Generally Accepted Accounting Principles are applied to development stage enterprises in the same way as established companies. The financial statements indicate that the business is a development stage enterprise and describe the development process. Accumulated net losses are reported in the balance sheet as "deficit accumulated during the development stage." Revenue and expense accumulated from the beginning of the business are reported in the income statement. The sources and uses of funds accumulated from the beginning of the business are shown in the statement of financial position. In its first year as an established company, the business must reveal that it was previously reported as a development stage enterprise.