[cpaswag]

So I got an email from jeff saying AFS and TS are “bye-bye” but Becker still has them in updated book as well . I am taking in February. Also Becker still has completed contract and percentage of completion

[SchruteBeet]

Bump

[jeff]

There are still AFS/Trading debt securities … the equity side went “bye-bye” as I eloquently put it 🙂

You’ll have to ask them about % of completion, etc. The new standard matches revenue recognition with performance obligations.

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[jeff]

I should also add that the new guidance has some similarities with % of completion – but it’s not as simple as before.

– Revenue is recognized at a point in time or over time and there’s criteria for this.

– Input vs output method

– “Control” is a big part of the new standard as well. Does the customer “control” the work?

So, when I say that % of completion doesn’t exist – I mean that the “over time” aspect sounds similar – but it’s a lot more nuanced than just recognizing revenue as the contract is completed like before.

You have to match $$ with performance obligations, establish who has “control”, and then if the contract gets altered along the way, that alters things as well.

Clear as mud?

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[JAStansel]

I can tell you that Roger has updated, and aligns with Jeff. Ultimately, debt securities (i.e., bonds) are still categorized as Trading, AFS or HTM while equity securities (i.e., stocks) are carried at Fair Value, unless equity method is elected (due to significant influence). A lot of the class questions stayed the same, just added the word “debt” before securities when asking about Trading, AFS or HTM categories, so make sure to read carefully.

[Author]

Replies