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Accounting Spotlight

Accounting Spotlight newsletters, published as warranted, analyze key issues related to the implementation of accounting guidance on selected topics, such as revenue recognition.

Related Publications

Accounting Spotlight — Current expected credit losses — Complexities for commercial entities

Nov 20, 2019

This Accounting Spotlight discusses the complexities that many commercial entities may encounter when applying the FASB’s new current expected credit loss (CECL) standard, particularly the standard’s new impairment model in ASC 326-20 (the “CECL model”). Relevant considerations for a commercial entity include (1) leveraging current processes to determine expected credit losses in a manner consistent with the CECL model, (2) determining whether certain types of assets (e.g., vendor rebates and refundable customer advances) are within the scope of the CECL model, and (3) providing sufficient documentation to support all judgments and decisions related to the entity’s implementation of the new CECL standard.

Accounting Spotlight — Cloud computing arrangements — Implementation complexities

Oct 29, 2019

This Accounting Spotlight discusses the complexities of identifying and classifying the capitalizable costs incurred to implement a cloud computing (or hosting) arrangement that is a service contract. Entities will need to use significant judgment when applying the guidance in ASU 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract."

Accounting Spotlight — Revenue recognition — Identifying performance obligations

Sep 17, 2019

This Accounting Spotlight discusses the identification of performance obligations under the new revenue standard (the guidance in ASU 2014-09, “Revenue From Contracts With Customers (Topic 606),” as amended). The publication explains that an entity applying the new revenue standard is required to identify a performance obligation by determining whether a promised good or service is (1) capable of being distinct and (2) distinct within the context of the contract. If the promised good or service does not meet both of these requirements, it must be combined with other goods or services promised in the contract until there is a combination of goods or services that meets the requirements.

Accounting Spotlight — Revenue recognition — Determining whether a performance obligation is satisfied at a point in time or over time

Jun 24, 2019

This Accounting Spotlight discusses the fact that under the FASB’s new revenue standard (the guidance in ASU 2014-09, “Revenue From Contracts With Customers (Topic 606)," as amended), entities may need to recognize revenue over time instead of at a point in time. They should evaluate the criteria in ASC 606-10-25-27 to determine the appropriate timing for revenue recognition.

Accounting Spotlight — Revenue recognition — Evaluating whether an entity is acting as a principal or as an agent

May 28, 2019

This Accounting Spotlight discusses the key principal-versus-agent considerations under the FASB’s new revenue standard (the guidance in ASU 2014-09, "Revenue From Contracts With Customers (Topic 606)," as amended) that an entity must evaluate to determine whether it is a principal or an agent in a transaction. The changes result from the standard’s shift from a risks-and-rewards model to a control model.

Accounting Spotlight — Revenue recognition — Accounting for costs of obtaining a contract

Apr 05, 2019

This Accounting Spotlight discusses whether particular costs, such as salaries, commissions, and bonus payments, are incremental costs of obtaining a contract with a customer and therefore should be capitalized under the cost guidance of the new revenue standard as codified in ASC 340-40. It also highlights considerations for determining the amortization period for capitalized costs of obtaining a contract with a customer in accordance with that guidance.

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Accounting Spotlight

Related Publications

Accounting Spotlight — Current expected credit losses — Complexities for commercial entities

Accounting Spotlight — Cloud computing arrangements — Implementation complexities

Accounting Spotlight — Revenue recognition — Identifying performance obligations

Accounting Spotlight — Revenue recognition — Determining whether a performance obligation is satisfied at a point in time or over time

Accounting Spotlight — Revenue recognition — Evaluating whether an entity is acting as a principal or as an agent

Accounting Spotlight — Revenue recognition — Accounting for costs of obtaining a contract

Correction list for hyphenation