GAAP Hot Topics - What You Need to Know (Course Id 2015)

This course provides an overview of several of the key accounting and reporting topics within U.S. GAAP.  This includes a discussion of accounting for business combinations, revenue recognition principles, and leasing transactions.  This course also address topics such as goodwill impairment, litigation, how to account for software (both internal-use and for resale), requirements related to accounting changes and error corrections, as well as the appropriate use of Non-GAAP financial measures. 

NASBA QAS - Text - NASBA Registry - 2015

Chapter 1
Accounting for Business Combinations

• Identify the definition of a business as it relates to a business combination transaction
• Recognize steps involved in the acquisition method
• Recognize how assets and liabilities of a business combination are recorded/measured
• Identify how to measure goodwill and gains from bargain purchases
• Identify the measurement period for business combinations
• Recognize the relief afforded to private and not-for-profit entities for business combinations

Chapter 2
Revenue Recognition

• List the five steps involved in the 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 3
Lease Transactions

• Determine whether an arrangement contains a lease as well as how to classify that lease
• Recognize the recognition and measurement requirements for both lessees and lessors
• Identify the classification criteria for sales-type, direct financing, and operating leases
• Identify the overall requirements for lease modifications
• Recognize the criteria used for sale and leaseback transactions
• Identify the presentation requirements for both lessees and lessors

Chapter 4
Goodwill Impairment

• Identify the recognition requirements related to goodwill
• Recognize overall characteristics of goodwill impairment testing
• Differentiate between the qualitative and quantitative test of goodwill impairment
• Identify key characteristics of the accounting alternative for goodwill
• Recognize the key disclosure requirements for goodwill and goodwill impairment losses

Chapter 5
Litigation & Legal Contingencies

• Differentiate between probable, reasonably possible, and remote litigation outcomes
• Identify when to accrue a liability for litigation-related contingencies under ASC 450-20
• Recognize the role of legal counsel in the litigation process
• Identify the appropriate financial statement disclosures for litigation-related contingencies

Chapter 6
Accounting for Software

• Distinguish between software that is considered internal-use and not considered internal-use
• Recognize how implementation costs are accounted for in various stages of software development
• Identify when capitalization and amortization should commence
• Recognize how implementation costs of hosting arrangements are accounted for differently
• Recognize software that is within the scope of ASC Topic 985-20
• Identify how software costs are recorded prior to and after establishing technological feasibility
• Recognize how amortization is recorded for capitalized software costs
• Identify general disclosure requirements related to software for resale

Chapter 7
Accounting Changes and Error Corrections

• List the different types of accounting changes and how they affect an entity’s financial statements
• Differentiate between the requirements for the different types of accounting changes
• Identify the steps involved in the required assessment for a correction of an error
• Differentiate between the iron curtain and rollover methods for quantifying a correction of an error
• Recognize the different types of restatements required as a result of accounting changes

Chapter 8
Non-GAAP Financial Measures

• Differentiate between a GAAP financial measure and a non-GAAP financial measure
• Recognize examples of different types of non-GAAP financial measures
• Identify which SEC guidance is applicable to different types of non-GAAP financial measures
• Recognize disclosures within the scope of Regulation G
• Identify key requirements included within both Regulation G and Regulation S-K related to these measures

Chapter 1 - Accounting for Business Combinations

Learning Objectives

Chapter Overview

Introduction

Definition of a Business

The Acquisition Method

Step 1: Identifying the Acquirer

Step 2: Determining the Acquisition Date

Review Questions

Step 3: Recognizing/Measuring Identifiable Assets & Liabilities

Review Questions

Step 4: Recognizing and Measuring Goodwill or Gain from a Bargain Purchase

Measurement Period

Business Combination Achieved in Stages

Subsequent Measurement

Reverse Acquisitions

Private & Not-For-Profit Accounting Alternatives

Conclusion

Review Questions

Chapter 2 - Revenue Recognition

Learning Objectives

Chapter Overview

Introduction

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

Step 5: Recognize Revenue When (or as) Performance Obligations are Satisfied

Conclusion

Review Questions

Chapter 3 - Lease Transactions

Learning Objectives

Chapter Overview

Introduction

Scope

Lease Determination

Lessee Lease Classification

Recognition and Measurement

Review Questions

Subsequent Measurement

Illustrative Example – Lessee Accounting

Lessor Accounting

Lease Modifications

Sale and Leaseback Transactions

Review Questions

Financial Statement Presentation Requirements

Disclosure Requirements

Top Challenges in ASC 842

Conclusion

Review Questions

Chapter 4 - Goodwill Impairment

Learning Objectives

Chapter Overview

Introduction

Business Combination Refresher

Initial Recognition of Goodwill

Overall Accounting for Goodwill

Impairment Testing Requirements

Qualitative Test vs. Quantitative Test

Review Questions

Performing the Qualitative Test

Performing the Quantitative Test

Income Tax Considerations

Goodwill Impairment Accounting Alternative

Goodwill Disclosures for Public Entities

Goodwill Disclosures for Accounting Alternative

Conclusion

Review Questions

Chapter 5 - Litigation & Legal Contingencies

Learning Objectives

Chapter Overview

Introduction

Types of Legal Disputes

Importance of Accurate Evaluation

Applicable U.S. GAAP Guidance

Likelihood of Litigation Outcomes

Assessing the Likelihood of Litigation Outcomes

Review Questions

Role of Legal Counsel

Asserted vs. Unasserted Claims

Recognition and Measurement of Legal Contingencies

Gain Contingencies

Financial Statement Disclosures

Conclusion

Review Questions

Chapter 6 - Accounting for Software

Learning Objectives

Chapter Overview

Introduction

What is and is not Internal-Use Software?

Scope of Internal-Use Software Guidance

Stages of Software Development

Preliminary Project Stage

Application Development Stage

Postimplementation-Operation Stage

Upgrades & Enhancements

Commencement of Capitalization

Amortization – Non-Cloud Based Arrangements

Amortization – Cloud Based Arrangements

Impairment Considerations

From Internal-Use to External

Presentation Requirements

Disclosure Requirements

Review Questions

Switching Gears – Software for Resale

Scope

Technological Feasibility

Costs Incurred After Technological Feasibility

Production Costs

Inventory Costs

Purchased Software for Resale

Funded Software Development Arrangements

Amortization of Capitalized Costs

Conclusion

Review Questions

Chapter 7 - Accounting Changes and Error Corrections

Learning Objectives

Chapter Overview

Introduction

Changes in Accounting Principle

Accounting for the Change in Accounting Principle

Review Questions

Justifying a Change in Accounting Principle

Change in Accounting Principle – Illustrative Example

Disclosures Required for Changes in Accounting Principles

Change in Accounting Estimate

Change in Reporting Entity

Review Questions

Accounting for Correction of Errors

Internal Control Considerations

Conclusion

Review Questions

Chapter 8 - Non-GAAP Financial Measures

Learning Objectives

Chapter Overview

Introduction

What is a Non-GAAP Financial Measure?

Examples of Non-GAAP Financial Measures

Where Do Non-GAAP Financial Measures Show Up?

Review Questions

What Drove the Increase in Use of Non-GAAP Financial Measures

Why Do Regulators Care About Non-Financial Measures?

Where Do I Look to For Guidance?

Regulation G

Review Questions

Regulation S-K

SEC Compliance & Disclosure Interpretations

Misleading Concerns

Earnings Management

Prominent Presentation

Tax Impacts

EBIT & EBITDA

Free Cash Flow

Segment Information

Conclusion

Review Questions

Glossary of Key Terms