Skills for accounting research 3rd edition pdf

Scope And Recognition Guidance

3. Within the scope section of ASC 815-10 (Derivatives), which guidance comes first-the definition of a

derivative, or scope exceptions to this topic? Explain.

7. A company has entered into a forward contract for the purchase of gold, in 2 years, for $1300/oz. Does this

a1rnngement meet the definition of a derivative? Analyze all required parts of the definition. (You may simply

refer to the guidance excerpts included within this chapter to respond.)

Revenue Recognition Exercises

11. Within ASC 606-10 (the revised revenue model), where can a researcher find:

a. The core principle?

b. The five steps for applying the core principle?

c. The objective of the guidance in this topic?

d. Guidance on the incremental costs of obtaining a contract with a customer?

Case Study 6.1

Be Our Guest Guest Lodge, Inc. enters into a service agreement with the U.S. National Park Service. The contract gives Guest Lodge the right to operate the Wilderness Lodge in a national park-an upscale hotel and restaurant lodge in the heart of a national park. Guest Lodge must pay an upfront fee of $1 million to be used toward capital improvements in the lodge and for trail maintenance and parking lot maintenance. Per the Agreement, Guest Lodge has the right and obligation to operate the lodge and must remit I 0% of all gross sales to the National Park Service. Evaluate the proper accounting and framework for this contract-is it a service concession arrangement? How does this impact your evaluation of whether the contract is a lease or how revenue should be recognized? Consider by analogy any public company filings.