This course provides a detailed overview of the key principles and requirements with respect to revenue recognition and leasing transactions. Both of these areas witnessed substantial changes made in years past by the FASB. This course takes a quick trip down memory lane to explore how both of these standards evolved, and then takes the user down a detailed path of understanding the key financial reporting requirements of each.
Chapter 1 provides an overview of the revenue recognition standard prescribed by ASC Topic 606. This includes a discussion of how the standard today evolved over time and why a change was needed. More importantly, this chapter walks through the 5-step process for revenue recognition and also provides information and requirements related to financial statement disclosures.
Chapter 2 provides an in-depth overview of the lease accounting standard issued by the FASB) in February 2016. This includes a discussion of the primary reasons for the change as well as how to identify a lease within a contract. This chapter also provides an in-depth review of lease classification, initial measurement, subsequent measurement, presentation & disclosure, as well as transition requirements. The chapter concludes with a discussion of some of the significant differences between IFRS 16 (the IASB’s lease accounting standard) as well as private company considerations.
Learning Objectives
- Recognize how the new revenue recognition standards were developed between the FASB and IASB.
- Discover and list the five steps involved in the new 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.
- Identify presentation issues with respect to contract assets and contract liabilities.
- Explore and understand the overall disclosure requirements and transition methods related to the new standards.
- Recognize key amendments from ASUs issued subsequent to the initial release of the new revenue recognition standards.
- Recognize how the leasing standard has evolved and how the new standard is organized.
- Identify and determine whether an arrangement contains a lease.
- Identify considerations with respect to substitution rights and decision-making rights.
- Identify the criteria for the new finance lease and short-term leases.
- Recognize the recognition and measurement requirements for both lessees and lessors.
- Identify the recognition criteria for sales-type, direct financing, and operating leases.
- Identify the overall requirements with respect to lease modifications.
- Identify the criteria used for sale and leaseback transactions.
- Identify the considerations with respect to a lessee’s involvement in construction of a leased asset.
- Identify the presentation requirements for both lessees and lessors.
- Recognize both qualitative and quantitative disclosure requirements for both lessees and lessors.
- Identify the effective date for the new lease accounting standards.
- Identify the significant differences between ASC 842 and IFRS 16.
- Recognize considerations of and alternatives provided to private companies.
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Prerequisites
No advanced preparation or prerequisites are required for this course.
Education Provider Information
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