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| Author : | Jae K. Shim, Ph.D., CPA |
| Course Length : | Pages: 87 ||| Word Count: 43,965 ||| Review Questions: 18 ||| Final Exam Questions: 33 |
| CPE Credits : | 6.0 |
| IRS Credits : | 0 |
| Price : | $53.95 |
| Passing Score : | 70% |
| Course Type: | NASBA QAS - Text - NASBA Registry |
| Technical Designation: | Technical |
| Primary Subject-Field Of Study: | Accounting - Accounting for Course Id 2178 |
| Description : | In 2014, after years of deliberations, the Financial Accounting Standards Board (the FASB) and the International Accounting Standards Board (the IASB) jointly issued the Accounting Standard Update (ASU) No. 2014-09 (codified primarily in ASC 606) and IFRS 15, respectively. ASC 606 replaces virtually all (including industry-specific) U.S. GAAP revenue guidance with a single model. The standard does not just change the amounts and timing of revenue but potentially affects organizations’ financial statements, business processes, and internal control over financial reporting. The revenue recognition standard also affects other related accounting topics such as contract modification, rights of return, licensing, principal-versus-agent considerations, and income tax. Moreover, the standard creates new and expanded disclosure requirements. This revenue recognition guide and course reorganizes the guidance contained in ASC 606, to follow the five-step revenue recognition model along with other guidance impacted by this standard. It also provides examples to illustrate the application. The course is designed to help you navigate the complexities of this standard and identify the implications of it. It provides a working knowledge of the fundamentals of the revenue standard that can be applied, regardless of the company size, in the real world. |
| Usage Rank : | 75238 |
| Release : | 2023 |
| Version : | 1.0 |
| Prerequisites : | General Accounting. |
| Experience Level : | Overview |
| Additional Contents : | Complete, no additional material needed. |
| Additional Links : |
Revenue Recognition
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| Advance Preparation : | None. |
| Delivery Method : | QAS Self Study |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 10-Aug-2023 |
| 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 - NASBA Registry - 2178 |
| Keywords : | Accounting, Revenue, Recognition, Practical, Guide, cpe, cpa, online course |
| Learning Objectives : |
2. Cite the key changes of the revenue recognition practice compared to legacy GAAP 3. Recognize the impact of the revenue standard on the organizations 4. Identify the applicability of the revenue standard 5. Recognize the steps involved in implementing the new revenue guidelines 6. Identify the presentation and disclosure requirements 7. Recognize the requirements for other revenue topics (e.g., warranties, principal-versus agent, licensing) 8. Recognize the indicators for potential misstated revenue recognition 9. Identify control activities that reduce the risk of misstatement in revenue |
| Course Contents : | Chapter 1 - Revenue Recognition: Practical Guide Part I Fundamentals of the Revenue Standard A Uniform Framework Rising to the Challenge Major Improvements Applicability Scope and Scope Exceptions Collaborative Arrangements Other Scope Considerations Key Concepts of ASC 606 Attributes of a Contract Essence of a Performance Obligation Determination of the Transaction Price Allocation of the Transaction Price Recognition of Revenue Accounting Policy Elections and Practical Expedients Review Questions - Section 1 Part II The Five-Step Revenue Recognition Model Step 1: Identify the Contract with a Customer General Rules Attributes of a Contract Combining Contracts Modifying Contracts Step 2: Identify Performance Obligations General Rules Identification of Promises in a Contract Determination of Performance Obligations Principal vs. Agent Assessment Options for Additional Goods or Services Sale with a Right of Return Review Questions - Section 2 Step 3: Determine the Transaction Price General Rules Variable Consideration Significant Financing Component Noncash Consideration Nonrefundable Upfront Fees Consideration Payable to a Customer Step 4: Allocate the Transaction Price to Performance Obligations General Rules Determination of Standalone Selling Prices Allocation of Discounts Allocation of Variable Consideration Changes to the Transaction Price Step 5: Recognize Revenue General Rules Satisfaction of Performance Obligations Over Time Satisfaction of Performance Obligations at a Point in Time Repurchase Agreements Consignment Arrangements Bill-and-Hold Arrangements Review Questions - Section 3 Part III Other Revenue Topics Contract Costs Costs to Obtain a Contract Costs to Fulfill a Contract Warranties Licenses of Intellectual Property General Rules Identification of Performance Obligation Determination of the Nature of License Review Questions - Section 4 Part IV Presentation and Disclosure General Rules Presentation Contract Asset and Contract Liability Accounts Receivable Disclosure Contract with Customers Significant Judgments Assets Recognized from the Costs to Obtain or Fulfill a Contract SEC Common Letters Review Questions - Section 5 Part V Internal Control over Financial Reporting Implications to Internal Controls Internal Control over Financial Reporting Revenue-Related Issues Estimates and Judgment Internal Control System Control Environment Risk Assessment Control Activities Information and Communication Monitoring Review Questions - Section 6 Appendix ASC 606 vs. ASC 605 Comparison Glossary Table of Examples Applicability Example 1: Nonmonetary Transaction Example 2: Collaborative Arrangement Example 3: Research Grant Example 4: Payment Relating to an Existing Exchange Transaction Example 5: Sales of Real Estate Step 1: Identify the Contract with a Customer Example 6: Reassessing the Criteria for Identifying a Contract Example 7: Assessing the Existence of a Contract - No Written Sales Agreement Example 8: Collectibility of the Consideration Example 9: Consideration Is Not the Stated Price - Implicit Price Concession Example 10: Contract Modifications - Unpriced Change Order Example 11: Modification of a Contract for Goods Example 12: Modification of a Services Contract Example 13: Modification Resulting in a Cumulative Catch-Up Adjustment to Revenue Step 2: Identify the Performance Obligations in the Contract Example 14: Distinct or Not Distinct Example 15: Principal vs. Agent Assessment Example 16: Right of Return Step 3: Determine the Transaction Price Example 17: Price Concessions Example 18: Estimate Variable Consideration - The Expected Value Method Example 19: Constraining Estimates of Variable Consideration Example 20: Significant Financing Component Example 21: Entitlement to Noncash Consideration Example 22: Consideration Payable to a Customer Example 23: Common Forms of Consideration Paid to a Customer Step 4: Allocate the Transaction Price to the Performance Obligations Example 24: Estimating Standalone Selling Price - Residual Approach Example 25: Allocating a Discount Example 26: Allocating Variable Consideration Example 27: Change in Transaction Price Step 5: Recognize Revenue Example 28: Customer Simultaneously Receives and Consumes the Benefits Example 29: Customer Controls the Work in Progress Example 30: Alternative Use Assessment Example 31: Over Time Revenue Recognition Example 32: Selecting the Measures of Progress Example 33: Customer with Physical Possession (No Control of an Asset) Example 34: Call Option - Leasing Example 35: Put Option - Sale with a Right of Return Example 36: Consignment Arrangement Example 37: Bill-and-Hold Arrangement Contract Costs Example 38: Incremental Costs of Obtaining a Contract Example 39: Costs to Fulfill a Contract Accounting for Warranties Example 40: Warranties Licenses of Intellectual Property Example 41: Software License and Services Are Distinct Example 42: Contractual Provisions Represent Attributes of Additional Rights Example 43: Right to Access Intellectual Property Example 44: Right to Use Intellectual Property Example 45: Sales-Based Royalty Presentation and Disclosure Example 46: Disaggregation of Revenue - Quantitative Disclosure Example 47: Significant Judgments Example 48: SEC Staff Comment - Disaggregated Revenue Disclosures Example 49: SEC Staff Comment: Performance Obligations Implications to Internal Control Example 50: Material Weakness: Revenue Related-Issues Table of Illustrations Illustration 1 Contract Existence Criteria Not Met Illustration 2: Accounting for Contract Modification Illustration 3: Determination of Performance Obligations Illustration 4: Assessment of Consideration Received (Fixed or Variable) Illustration 5: Determining Standalone Selling Price Illustration 6: Satisfaction of Performance Obligations Illustration 7: Forwards and Call Options Illustration 8: Put Options Illustration 9: Accounting for Incremental Costs Illustration 10: Accounting for Contract Fulfill Costs Illustration 11: Determination of Types of Warranties Illustration 12: Accounting for Licenses of Intellectual Property Illustration 13: Right to Access or Right to Use Illustration 14: Presentation - Receivable, Contract Asset or Contract Liability |
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