Investors and other financial statement have provided comments to the SEC on revenue-related disclosures. They felt the standard did not provide sufficient detail to perform detailed analysis. One of the goals of the new standard is to introduce disclosure requirements that improve the information communicated in financial statements.
The new standard requires additional disclosures to better communicate the nature, amount, timing, and uncertainty of an entity’s revenue and cash flows (ASC 606-10-50-1). Filers are required to provide qualitative and quantitative information about the following:
• Contracts with customers
• Significant judgments made in applying the new standard
• Assets recognized from the costs to obtain or fulfill a contract
An entity is required to disclose revenue recognized from contracts with customers as well as impairment losses on any contract assets arising from those contracts. Disclosure is required unless these amounts are presented separately on its financial statements.
Publication Date: July 2022
Designed For
Anyone working with the revenue recognition standard including CEO’s, Boards, CFO’s, Financial and Accounting Personnel, Internal and External Auditors.
Topics Covered
- Disaggregation of revenue
- Contract balances
- Performance obligations
- Disclosure requirements for the standard
Learning Objectives
- Identify why more robust disclosure requirements are needed
- Recognize how to evaluate components of contract balances required to be disclosed
- Identify components of performance obligations required to be disclosed
- Recognize how to evaluate components of significant judgements that must be disclosed
- Recognize how evaluate components of transaction price that must be disclosed
- Describe assets recognized from costs to obtain or fulfill a contract that must be disclosed
- Identify how to discuss components that must be reported in interim reporting
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Accounting (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Lynn Fountain
Lynn Fountain has over 38 years of experience spanning public accounting, corporate accounting and consulting. 20 years of her experience has been working in the areas of internal and external auditing and risk management. 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. Lynn has held two Chief Audit Executive (CAE) positions for international companies. In one of her roles as CAE, she assisted in the investigation of a multi-million-dollar fraud scheme perpetrated by a vendor that spanned 7 years and implicated 20 employees. The fraud was formally investigation by the FBI and resulted in 5 indictments estimating a $13M fraud loss.
Ms. Fountain is currently engaged in her own consulting and training practice. She is a highly sought-after trainer and international speaker. In addition, Ms. Fountain has assisted numerous companies with enterprise risk management frameworks, internal audit processes and financial accounting. She also serves as a discussion leader for the AICPA for numerous classes finance, accounting and risk management topics.
Ms. Fountain is the author of three separate technical books. Her first book released in 2015 by the Institute of Internal Auditors Foundation is entitled “Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations”. Her second book “Leading the Internal Audit Function” was released in October 2015 by Taylor & Francis Publications. This book serves as the initial launch for a series of leading practice internal audit and information technology publications. Her third book “Ethics and the Internal Auditor’s Dilemma” was released in December 2016.
Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials.