Self-Study
6
Update
Accounting
A background in revenue recognition.

Course Description

In this course, Ray Thompson breaks down the new revenue recognition Standard (FASB and IASB have jointly issued ASU 2014-09/IFRS 15), which will have a major effect on the way that companies account for contracts with customers. In order to address the longstanding dissatisfaction with this area of revenue recognition, the Boards have revamped their guidance by completely rebuilding their framework on revenue recognition across a broad range of industries. For companies that engage in complex transactions and business arrangements, their revenue, income, assets, and liabilities will change quite significantly. You'll learn everything you need to know about the new Standard, with the changes presented in a thorough, straightforward manner.



Instructor

Ray Thompson, CBA, CFM, CMA

Dr. Ray Thompson, CBA, CFM, CMA, is an emeritus associate professor of accounting and finance at the University of Pittsburgh. He served as department head at the University of Pittsburgh at Johnstown (UPJ) campus for over 25 years. He was the associate director of UPJ’s Entrepreneurial Development Assistance Project, where he was involved in financial consulting and assisting in preparing loan proposals for small business start-ups. He has taught in graduate and undergraduate business programs in Europe, Africa, and the United States.

Ray received his BS and MS degrees in economics and systems dynamics from the University of Bradford in the United Kingdom, his MBA in accounting from Xavier University in Ohio, and his PhD in business administration from Nova University. Ray is also certified in financial management and is a certified management accountant (CMA), a certified business appraiser (CBA), and holds the accredited valuation analyst credential from the National Association of Certified Valuators and Analysts (NACVA). He recently became certified in IFRS though the Institute of Chartered Accountants in England and Wales.

Ray teaches at Western CPE conferences and produces both self-study and webcast courses as well. He also authors and conducts professional development seminars for Fortune 500 and international corporations, multinational financial institutions, state CPA societies, and CPA firms throughout the United States. In addition, Ray provides business valuation services and consults with accounting firms and sole practitioners on a range of accounting issues in the area of valuation. He’s a faculty associate member of the AICPA and the Pennsylvania Institute of Certified Public Accountants (PICPA) and a member of the Financial Reporting Faculty of ICAEW.



Course Specifics

Accounting
Mar 13, 2017
A background in revenue recognition.
SS1153415
114
None


Compliance Information

103220
Qualifies for CA Fraud: No


Learning Objectives

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

Chapter 1

  • Identify why FASB and IASB believed it was necessary to rebuild the revenue recognition guidance as compared to GAAP.

Chapter 2

  • Cite the contract-based model as explained in ASC 2014-09.
  • Cite components of the five steps involved in ASC 2014-09's revenue recognition model.

Chapter 3

  • Identify how multiple performance obligations affect contracts.
  • Identify changes in terminology under the Board's new revenue models.
  • Select criteria to properly analyze contracts.

Chapter 4

  • Identify the location of legacy guidance.
  • Contrast the concept of delivery over time as used in ASU 2014-09 with percent of completion as used in current GAAP.
  • Select criteria that needs to be met in order for a transaction to be considered delivered at a point in time.

Chapter 5

  • Cite FASB's practical expedients approach for implementing ASU 2014-09 when the full retrospective approach is adopted.
  • Name the disclosure requirements when the modified retrospective method is adopted under ASU 2014-09.
  • Identify SEC's current reporting and disclosure requirements and how they will affect the transition to ASU 2014-09.
  • List the dates on which ASU 2014-09 becomes effective for public and nonpublic companies in U.S.

Chapter 6

  • Define terms related to rebates, refunds, and other amounts payable to customers.
  • List the criteria for separating and capitalizing contract costs under ASU 2014-09.
  • Explain the concept of distinct as applied to licenses under ASU 2014-09.
  • Distinguish between expected value and most likely amount as the terms are used in ASU 2014-09.
  • Identify the criteria used in 2014-09 for immediately recognizing or deferring up-front fees.

Chapter 7

  • List the types of contracts that are explicitly scoped out of ASU 2014-09.
  • List the criteria used in ASU 2014-09 to determine whether a party is a principal or an agent.
  • Define consignment arrangements.
  • Identify implementation concepts for the Board's five-step model.
  • Cite contingencies addressed under ASC 450.



Table of Contents

Chapter 1 – Overview

Learning Objectives

Overview

Current Revenue Recognition

Chapter 1 – Review Questions

Chapter 2 – Foundations: The Contract-Based Approach and Five-Step Model

Learning Objectives

Foundations: The Contract-Based Approach

The Five-Step Approach

Chapter 2 – Review Questions

Chapter 3 – The Five-Step Model: Guidance and Examples

Learning Objectives

Overview

Step 1: Analyze the Contract

Step 2: Identify the Performance Obligations

Step 3: Determine the Transaction Price

Step 4: Allocate the Transaction Price to the Separate Performance Obligations

Step 5: Recognize Revenue as “Delivery” Takes Place

Chapter 3 – Review Questions

Chapter 4 – Percent of Completion and Separation of Combined Performance Obligations

Learning Objectives

What Happened to Percent of Completion?

Point in Time Delivery

Delivery over Time

Measuring Progress

When to Separate and When to Combine Performance Obligations

Chapter 4 – Review Questions

Chapter 5 – Transition and Implementation

Learning Objectives

Transition and Effective Date

Full Retrospective Application

Modified Retrospective Application

Presentation and Disclosure

Disaggregation of Revenue

Contract Balances

Performance Obligations

Significant Judgments

Chapter 5 – Review Questions

Chapter 6 – Key Areas in Revenue Recognition

Learning Objectives

Introduction

Refunds and Rights of Return

Warranties and Defects

Assurance (Regular) Warranties

Service (Extended) Warranties

Discounts, Rebates, and Price Concessions

Volume Rebates

Rebates, Refunds, and Other Amounts Payable to Customers

Nonrefundable, Up-Front Fees

Contract Modifications

Modifications That Are Separate Contracts

Modifications That Do Not Constitute Separate Contracts

Licenses of Intellectual Property

Contract Costs

Chapter 6 – Review Questions

Chapter 7 – The Five-Step Model: Implementation and Examples

Learning Objectives

Introduction

Step 1: Analyze the Contract

Step 2: Analyze the Performance Obligations

Principal versus Agent

Consignment Arrangements

Taxes Collected on Behalf of Others

Step 3: Determine the Transaction Price

Postponing Recognition When Amounts Are Highly Uncertain

Extended Payment Terms and the Time Value of Money

Noncash Consideration

Step 4: Allocate Transaction Price to the Performance Obligation

Step 5: Recognize Revenue as “Delivery” Takes Place

Repurchase Agreements

Bill and Hold

Acceptance

Chapter 7 – Review Questions

Review Question Answers and Rationales

Glossary

Index

Final Examination

Answer Sheet

Course Evaluation



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