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Key Principles of Revenue Recognition and Leasing (Course Id 1985)

Updated / QAS / Registry
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Author : Kelen Camehl, CPA, MBA
Course Length : Pages: 43 ||| Review Questions: 12 ||| Final Exam Questions: 20
CPE Credits : 4.0
IRS Credits : 0
Price : $35.95
Passing Score : 70%
Course Type: NASBA QAS - Text - Technical - NASBA Registry
Primary Subject-Field Of Study:

Accounting - Accounting for Course Id 1985

Description :

This course provides an overview of the key principles related to both revenue recognition and leasing transactions.  The revenue recognition guidance is included within ASC Topic 606 and includes a five-step model identifying a contract, identifying performance obligation, determining the transaction price, allocating the transaction price to performance obligations, and recognizing revenue.  The lease accounting and reporting requirements are outlined in ASC Topic 842.  This topic addresses areas such as how to correctly identify a lease within a contract, as well as the overall recognition, measurement, subsequent measurement, and disclosure requirements.

Usage Rank : 0
Release : 2022
Version : 1.0
Prerequisites : None.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 12-Dec-2022
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - Text - Technical - NASBA Registry - 1985

Keywords : Accounting, Key, Principles, Revenue, Recognition, Leasing, cpe, cpa, online course
Learning Objectives :

Chapter 1
Revenue Recognition

Upon completion of this chapter, you will be able to:
  • List the five steps involved in the new revenue recognition model
  • Recognize the considerations involved in identifying whether a contract exists
  • Identify the considerations involved with measuring the transaction price
  • Recognize the steps involved in allocating the transaction price to performance obligations

Chapter 2
Lease Transactions

Upon completion of this chapter, you will be able to:
  • Determine whether an arrangement contains a lease
  • Identify considerations with respect to substitution rights
  • Identify the criteria for the new finance lease and short-term leases
  • Recognize the new recognition and measurement requirements for both lessees and lessors
  • Identify the requirements related to lease modifications
  • Identify presentation and disclosure requirements for both lessees and lessors
Course Contents :

Chapter 1 - Revenue Recognition

Learning Objectives


Scope of ASC 606

The Main Provisions

Step 1: Identify the Contract(s) with a Customer

Step 2: Identify the Performance Obligations in the Contract

Review Questions

Step 3: Determine the Transaction Price

Step 4: Allocate Transaction Price to Performance Obligations

Review Questions

Step 5: Recognize Revenue When (or as) the Entity Satisfies a Performance Obligation


Review Questions

Chapter 2 - Lease Transactions

Learning Objectives


Effective Dates for the New Standard

Why Was a Change Necessary?

High Level Summary of ASC 842

Step One – Do you have a Lease?

Lease Existence - Illustrative Examples

Lease Classification for a Lessee

Short Term Leases

Recognition and Measurement

Lease vs. Nonlease Components

Measuring the Lease Payment

Determining the Lease Term

Measuring the Right-of-Use Asset & Lease Liability

Determining the Discount Rate

Review Questions

Subsequent Measurement Requirements

Finance Leases

Operating Leases

Illustrative Example – Lessee Accounting

Lessor Accounting

Lease Modifications

Sale and Leaseback Transactions

Assets under Construction

Review Questions

Presentation Requirements

Balance Sheet

Income Statement

Statement of Cash Flows

Financial Statement Disclosures

Lessee Disclosures

Lessor Disclosures

Transitioning to the New Standard

Practical Expedients

Alternatives Provided to Private Companies

Example Lease Disclosures

Example 1 – HP, Inc.

Example 2 – McDonald’s Corporation

Example 3 – Apple Inc.

Example 4 – The Home Depot, Inc.

ASUs Released After the New Standard

Post-Adoption Challenges

Review Questions

Glossary of Key Terms

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