- NY Credits : 2.0
- TX Credits : 2.0
- IRS Enrolled Agent Credits : Federal Tax/Tax Related Matters - 2.0
This course looks at the new tax accounting accrual-basis rules in T.D. 9941 and their relationship to the FASB's rules for Revenue from Contracts with Customers (Topic 606). The tax accounting rules have changed from a system of reliance on the all-events test to a more structured analysis set forth by the FASB. We will look at the FASB's prescribed steps in determining when AFS (applicable financial statements) revenue from contracts is recognized. There are circumstances when the taxpayer recognizes revenue from a contract over time. If they do not recognize revenue over time, they must recognize it at a point in time. You will see how the historical treatment of prepaid income has been modified and incorporated into the accrual basis regulations. The course will also discuss the change in accounting methods implications of these new rules for taxpayers.
Included with subscription(s):
Upon successful completion of this course, the user should be able to:
recognize the difference between the historical all-events test and the FASB approach to recognizing revenue for financial accounting purposes;
identify the steps used to arrive at applicable financial statement (AFS) revenue;
identify the required adjustments to the AFS revenue to determine the taxable revenue for the period;
determine the allocation of contract revenue to the performance obligation in the appropriate period;
identify the taxable revenue received before the goods are delivered or services performed per the regulations;
determine the inventory cost offset permitted before the entire selling price has included in revenue; and
recognize the change in accounting methods implications of the new rules.