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Technology and Health & Life Sciences

Task Force to Issue Final Consensus on Cloud Computing Arrangements

The Emerging Issues Task Force (“EITF”) has agreed to issue a final consensus on its project to clarify the accounting for implementation expenses for a cloud computing arrangement that is a service contract. Voted on at a recent EITF meeting, Issue No. 17-A, “Customer’s Accounting for Implementation, Setup, and Other Upfront Costs (Implementation Costs) Incurred in a Cloud Computing Arrangement That Is Considered a Service Contract,” will include the following decisions in the final consensus: Businesses will be required to capitalize the implementation costs of a hosting arrangement that is a service contract using the guidance under Goodwill and Other—Internal-Use. Read More.

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AICPA Revenue Recognition Working Drafts Issued

The American Institute of Certified Public Accountants’ (“AICPA”) Financial Reporting Executive Committee has released the following working drafts concerning revenue recognition guidance: Issue #6-9B, Gaming Entity’s Accounting for Management Contract Revenues, Including Costs Reimbursed by Managed Properties Issue #15-3, Contract Modifications The working drafts propose guidance for implementation matters with the five-step revenue recognition model under Topic 606, Revenue from Contracts with Customers. Specifically, Issue #6-9B relates to the gaming industry and Issue #15-3 focuses on the telecommunications industry. Feedback on both working drafts is due by Monday, July 2.

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AICPA and Healthcare Trade Group to Issue Guidance for Revenue Standard

To help healthcare companies with Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (Topic 606), the Healthcare Financial Management Association and the American Institute of Certified Public Accountants are planning to offer additional industry-specific guidance. The interpretive guidance is expected to address when healthcare providers should record revenue from special state funding methods that cover deficits between Medicaid reimbursements and patient care costs. Frustration over recognizing revenue related to provider tax programs was discussed at last month’s meeting between the FASB and the Healthcare Financial Management Association’s Principles and Practices Board. Brian Conner, a national practice leader for hospitals. Read More.

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FASB Proposes Improved Collaborative Arrangements Guidance

A newly proposed Accounting Standards Update (“ASU”) by the Financial Accounting Standards Board (“FASB”) offers organizations improved guidance regarding collaborative arrangements. The proposed ASU, Collaborative Arrangements (Topic 808): Targeted Improvements , focuses on changes to generally accepted accounting principles related to collaborative arrangements. One proposed change includes adding unit-of-account guidance under Topic 808, which would align the guidance with Topic 606, Revenue from Contracts with Customers, limited to when a company is reviewing the nature of Topic 606. The FASB also proposes two clarifications, such as defining when certain transactions concerning collaborative participants must be accounted for as revenue under Topic 606 when the collaborative member. Read More.

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Cherry Bekaert Managing Director Moderates NC TECH Talk Panel

Earlier this month at NC TECH TALK LIVE in Cary, North Carolina, Jonathan Kraftchick, CPA, moderated the “Ethics in Artificial Intelligence” panel discussion. Kraftchick, Managing Director of Training and Development for Cherry Bekaert’s Assurance & Accounting Services, shared his thoughts on the challenges and questions artificial intelligence raises in the technology sector. A recap of the panel discussion is available on the NC TECH website.

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FinREC Releases Working Drafts for Implementing Revenue Standard

Last week, the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”) issued industry-specific working drafts featuring proposed guidance for implementing Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, by the Financial Accounting Standards Board (“FASB”). The working drafts, which could be added to Audit and Accounting Guide: Revenue Recognition, are as follows: Aerospace and Defense Revenue Recognition Implementation Issue # 1-5: Transfer of Control on Non-US Federal Government Contracts — Clarification on Whether a Contract Priced at a Loss Could Qualify for Over Time Recognition in Accordance with FASB ASC 606-10-25-27(c): This proposal clarifies FinREC. Read More.

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