Full text of WATKINS FINANCIAL SERVICES, INC.'s X-17A-5 filed 2021-03-17 (period 2020-12-31). Broker-dealer annual report from SEC EDGAR — readable, searchable, and available as markdown for AI agents.
{0}------------------------------------------------ # 1. Nature of Operations Watkins Financial Services, Inc. (the "Company") was incorporated in the State of Utah on January 7, 2000, for the purpose of operating a broker dealer business. All issued shares of the Company's common stock are held by one shareholder (the shareholder). # 2. Summary of Significant Accounting Policies The Company's accounting policies reflect practices of the financial services industry and conform to generally accepted accounting principles. The following policies are considered to be significant: ## Basis of presentation The financial statements and accompanying notes have been prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America. The Company has elected a December 31 year-end. #### Revenue and cost recognition The Company recognizes revenue according to ASU No. 2014-9, Revenue from Contracts with Customers ("ASC Topic 606") which requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for goods or services. The guidance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, and (e) recognize revenue when the entity satisfies a performance obligation. Revenues are recognized as follows: - Commissions: Commissions and related clearing expenses are recorded on a trade-date basis as securities transactions occur. - Securities Transactions: Securities transactions are recorded on the trade date, as if they had settled. Profit and loss arising from all securities transactions entered into for the account and risk of the Company are recorded on a trade date basis. Customers' securities transactions are reported on a settlement date basis with related commission income and expenses reported on a trade date basis. {1}------------------------------------------------ # 2. Summary of Significant Accounting Policies (Continued) # Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent asse…Read the full text as markdown