Self-Study
3
Overview
Accounting
There are no prerequisites.

Course Description

This course provides an overview of the new revenue recognition standards prescribed by the Financial Accounting Standards Board (FASB) issued in May 2014. The new standards are effective for public business entities for annual reporting periods after December 1, 2017, including interim periods within that reporting period. For calendar year public filers, these entities will need to implement the new standards starting in 2018.



Instructor

Kelen Camehl, CPA, MBA

Kelen is a CPA with 15 years of progressive finance and accounting experience. Currently, he serves as a Senior Manager of Technical Accounting with HP, Inc. Prior to this role, he served in multiple accounting roles in the oil and gas industry with ConocoPhillips including technical accounting policy, SOX compliance, and global internal audit. He also gained public accounting experience with PricewaterhouseCoopers, working with various clients in the energy, electric, power, gas, and utility sectors in Houston, TX.

Kelen has remained actively involved in CPA exam content development for the past eight years and has authored over a thousand multiple-choice questions for various sections of the exam, attending workshops with the AICPA across the country each year. He also serves as an editorial advisor for the AICPA’s Journal of Accountancy as well as both an author and technical reviewer for continuing professional education (CPE) courses published by the AICPA. He also authors CPE courses and serves as a technical reviewer and revision editor for Wolters Kluwer (CCH Group) and WebCE as well as contributing to CPE course development for SmartPros. He also authors CPE courses for PDH Academy.

Kelen received his BBA in Accounting from Texas A&M University—Corpus Christi, TX and an MBA from the University of Texas—San Antonio. He is a CPA licensed in the state of Texas.



Course Specifics

Accounting
Dec 7, 2017
There are no prerequisites.
SS1163444
78
None


Compliance Information

103220
Qualifies for CA Fraud: No


Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Recognize how the new revenue recognition standards were developed between the FASB and IASB

Chapter 2

  • Identify the five steps involved in the new revenue recognition model
  • Recognize the steps involved in allocating the transaction price to performance obligations
  • Identify the considerations involved with measuring the transaction price
  • Recognize the considerations involved in identifying whether a contract exists

Chapter 3

  • Identify presentation issues with respect to contract assets and contract liabilities
  • Understand the overall disclosure requirements and transition methods related to the new standards

Chapter 4

  • Recognize key amendments from ASUs issued subsequent to the initial release of the new revenue recognition standards


Table of Contents

Chapter 1 – Introduction

Learning Objectives

Course Overview

Introduction

Why the Change in the Revenue Recognition Standards

Evolution of the Revenue Recognition Standard

Exhibit 1-1: Categories of Feedback from 2011 Exposure Draft

Justification for the Changes

Transaction Price Allocation

Exhibit 1-2: Conclusion on Transaction Price Allocation

Scope of the New Revenue Recognition Standards

Chapter 1 – Review Questions

Chapter 2 – Five Step Process for Revenue Recognition

Learning Objectives

The Main Provisions

Exhibit 1-3: Five Step Process for Revenue Recognition

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

Approval and Commitment

Identification of Each Party’s Rights

Identification of Payment Terms

Exhibit 1-4: Identification of Payment Terms—Construction Industry (BC39)

Commercial Substance

Probability of Collection of Substantially all of the Contract Consideration

Accounting for Contracts when Criteria is not met

Definition of Customer

Exhibit 1-5: Definition of Customer (BC54)

Combination of Contracts

Portfolio Level vs. Contract-by-Contract Basis

Contract Modifications

Exhibit 1-6: Contract Modifications (BC76)

Step 2: Identify the Performance Obligations in the Contract

Exhibit 1-7: Performance Obligations (BC84 thru 85)

Promised Goods or Services

Exhibit 1-8: Implied Promises (BC87)

Do Promised Goods/Service Represent Performance Obligations?

Exhibit 1-9: Is a Promised Good or Service Distinct?

Exhibit 1-10: When Not to Separate Distinct Goods or Services (BC102)

Step 3: Determine the Transaction Price

Variable Considerations

Exhibit 1-11: Price Concessions (BC194)

Expected Value Method

Most Likely Method

Exhibit 1-12: Estimation Method (BC200)

Constraining Estimates of Variable Consideration

Significant Financing Component

Exhibit 1-13: The Importance of Considering a Significant Financing Component (BC229)

Discount Rate

Exhibit 1-14: Discount Rate Consideration (BC239)

Presentation of the Significant Financing Component

Practical Expedient

Noncash Consideration

Consideration Payable to Customer

Step 4: Allocate Transaction Price to Performance Obligations

Exhibit 1-15: Allocating Transaction Price to Performance Obligations (BC266)

Estimating Standalone Selling Prices

Exhibit 1-16: Suitable Estimation Methods (ASC 606-10-32-34)

Allocating Discounts and Variable Consideration

Changes in Transaction Price

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

Exhibit 1-17: Consideration of Repurchase Agreements (BC423-424, 426, 428)

Over Time vs. At a Point in Time

Satisfied Over Time

Exhibit 1-18: Alternative Future Use Considerations (BC136)

Measuring Progress

Exhibit 1-19: Input & Output Methods

Satisfied at a Point in Time

Chapter 2 – Review Questions

Chapter 3 – Financial Statement Presentation Issues, Disclosure Requirements, and Transition Guidance

Learning Objectives

Financial Statement Presentation Issues

Contract Assets and Contract Liabilities

Exhibit 1-20: Contract Assets & Contract Liabilities

Costs to Obtain or Fulfill a Contract

Exhibit 1-21: Amortization of Contract Costs (BC309)

Disclosure Requirements

Exhibit 1-22: Board’s View on Existing Disclosure Requirements (BC327)

Contracts with Customers

Disaggregation of Revenue

Exhibit 1-23: Board’s View on Disaggregation of Revenue (BC335)

Contract Balances

Performance Obligations

Transaction Price Allocated to the Remaining Performance Obligations

Significant Judgments

Exhibit 1-24: Board’s View on Significant Judgments (BC355)

Assets Recognized from Costs to Obtain or Fulfill a Contract

Exhibit 1-25: Board’s View on Disclosures for Assets Recognized to Obtain or Fulfill a Contract (BC356 thru 357)

Transition Guidance

Retrospective Application with Practical Expedients

Retrospective Application with Cumulative Effect Recognized in the Current Period

Exhibit 1-26: Retrospective Application with Cumulative Catch-up (BC442)

Early Adoption Considerations

Chapter 3 – Review Questions

Chapter 4 – Recent Developments

Learning Objectives

Recent Developments

ASU 2015-14: Deferral of the Effective Date

Exhibit 1-26: Reasons for Deferral (BC5)

ASU 2016-08: Principal versus Agent Considerations

ASU 2016-10: Identifying Performance Obligations and Licensing

Identifying Performance Obligations

Licensing Implementation Guidance

Exhibit 1-27: Clarifications on Licensing Implementation Guidance (per the FASB)

ASU 2016-12: Narrow-Scope Improvements and Practical Expedients

Assessing the Collectability Criterion

Presentation of Sales Taxes and Other Similar Taxes Collected from Customers

Noncash Consideration

Contract Modifications at Transition

Completed Contracts at Transition

Technical Correction

Chapter 4 – Review Questions

Review Question Answers and Rationales

Glossary

Index

Final Examination

Answer Sheet

Course Evaluation



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