Recent content by cmesh

  1. C

    Multiple element arrangement

    Depends on whether the product and the implementation service qualify as separate units of accounting. To recognize revenue upon delivery of the product, the product must have standalone value to the customer, meaning that either Company A must sell the product to some customers without related...
  2. C

    Auditors going concern to extend beyond 12 months

    Couldn't agree more with you and Counterofbeans...
  3. C

    Cash and Cash Equivalents

    The standard indicates that cash equivalents includes investments with an original maturity--to the entity holding the investment--of three months or less. As a result, it would only be considered a cash equivalent if the maturity date was 90 days or less from the date the reporting entity...
  4. C

    Third party fees for structuring a loan

    The FASB originally addressed this in paragraphs 235 to 239 of FASB Concept Statement No. 6, which indicates that the costs are a reduction of the liability (technically not an asset--the debit is offset against the liability). The FASB codification is largely silent on it; however, ASC...
  5. C

    USA Capitalization of early pay-off penalty from old loan

    I agree with your judgment--the cost doesn't represent a cost of the new loan, but a cost of terminating the old loan.
  6. C

    Auditors going concern to extend beyond 12 months

    Theoretically it makes sense, but practically it get's difficult. There's already a significant amount of judgment involved in determining whether an entity will make it for another 12 months. Can't imagine the conversations between management and auditors if they had to argue about what would...
  7. C

    Software Capitalization Thresholds

    Agree with accounting nerd...it's really a policy decision as long as it's consistently applied and doesn't result in a material misstatement of fixed assets or expenses.
  8. C

    Accrue capital expenditure

    One other point: from a theoretical perspective, the question is whether a liability has been incurred. This is addressed in FASB Concept Statement No. 6 which states, "A liability has three essential characteristics: (a) it embodies a present duty or responsibility to one or more other...
  9. C

    USA Account for Compensation Paid at a Future Date (1 or 2 years later)

    I think the confusion is because you are talking about two different methods of accounting. What you are describing is booking the compensation based on the accrual method for books, while booking on a cash basis for taxes. This involves two different sets of books--one for your internal use...
  10. C

    USA Pass thru cost in Percent Complete Rev Rec

    I think the circumstance you have outlined is addressed under ASC 605-35-25-53, which states, "costs as here used might exclude, especially during the early stages of a contract, all or a portion of the cost of such items as materials and subcontracts if it appears that such an exclusion would...
  11. C

    USA Referral Credit

    Aaron, The accounting and presentation for customer incentives are covered under ASC 605-50. Specifically, 605-50-55-84 provides an example of coupons that can be redeemed by a customer (the closest analogy to your situation), indicating that the value of the coupons should be treated as a...
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