This segment is designed to evaluate Step Five of the new model dealing with recognizing revenue which is the final step in applying the new revenue recognition standard.
The new revenue recognition standard outlines five steps for proper compliance. On the surface, these steps seem simplistic. However, there are many components that should be considered within each step based on your process and industry. Previous courses in this series have covered the standard at a high level and evaluated steps one through four of the standard. They are:
• Complying with the Revenue Recognition Standard • Revenue Recognition: Considerations for Identifying the Contract - Part One and Part Two • Revenue Recognition: Considerations for Performance Obligations – Part One and Part Two • Revenue Recognition: Considerations for Transaction Price – Part One and Part Two • Revenue Recognition: Allocate Transaction Price to Performance Obligations
This segment is designed to evaluate Step Five of the new model dealing with recognizing revenue which is the final step in applying the new revenue recognition standard. For performance obligations that are fulfilled at a point in time, revenue is recognized at the fulfillment of the performance obligation. For performance obligations satisfied over time, an entity must decide how to appropriately measure the progress and completion of the performance obligation. A performance obligation is satisfied when or as control of the good or service is transferred to the customer. There are several issues companies should consider in applying step 5 of the standard:
• Determining if a Performance Obligation is satisfied over time • Identifying indicators of transfer of control of goods/services • Utilizing input and output methods to measure progress of revenue recognition • Understanding stand-ready obligations and how to apply discounts.
Within this segment, we will cover the aspects of recognizing revenue.
Note: Information within this course comes from readily available public domain documents and is utilized by the trainer as a supplement for relaying the course content.
Resources Consulted: • ASC 606-10-32-15 to 32-20, 55-244 to 55-246. • ASU 2014-09: “Revenue from Contracts with Customers.” BC229-BC247. • Croner-I, “A14 Revenue from Contracts with Customers.” (2019). Section 7.4.2-2 and 7.4.2-2. • FASB, ”Revenue Recognition Implementation Q&As.” January 2020). Questions 31-37. • FASB TRG Memo 20: “Significant Financing Components.” 26 January 2015. • FASB TRG Memo 30: “Significant Financing Components.” 30 March 2015. • EY, Financial Reporting Developments: “Revenue from contracts with customers.”January 2020. Section 5.5. • KPMG, Handbook: “Revenue Recognition.”December 2019. Section 5.5. • PWC, “Revenue from contracts with customers”March 2020. Section 4.4. • https://www.revenuehub.org/
Field of Study: Accounting
Lynn Fountain has over 45 years of experience spanning public accounting, corporate accounting and consulting. 24 years of her experience has been working in the areas of internal and external auditing. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance. Ms. Fountain has held two Chief Audit Executive positions for international companies. In 2011, as the Chief Audit Executive for an international construction/ engineering firm, she was involved in the active investigation of a joint venture fraud. The investigation included work with the FBI and ultimately led to indictment of the perpetrators and recovery of $13M. Ms. Fountain is currently engaged in her own training and consulting business and is a regular trainer for the AICPA. Ms. Fountain is the author of three separate technical books. “Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations” was published by the Institute of Internal Auditors Research Foundation. -“Leading The Internal Audit Function” and -“Ethics and The Internal Auditor Political Dilemma” were published by Taylor & Francis In addition Ms. Fountain was a contributing author to the certification program exam for the National Association of Accountants. She also has certificate programs on various on-line platforms. Ms. Fountain has performed as an adjunct instructor for the School of Business for Grantham University and developed the first internal audit curriculum for the School of Business at the University of Kansas. Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CGMA, CRMA credentials and CPA certificate (non-active).
