{"title":"St. Hubertus Crossing: Revenue recognition under ASC 606 guidance","authors":"Larry R. Davis, Diane M. Matson","doi":"10.1016/j.jaccedu.2021.100726","DOIUrl":null,"url":null,"abstract":"<div><p>The revenue recognition standard, ASU No. 2014-09--codified as ASC 606 Revenue Recognition, which replaces in its entirety ASC 605 Revenue Recognition and amends several other sections of the codification--is significantly affecting revenue recognition in many industries, including the construction industry. An actual construction project inspired this case. The contract for the project included the construction of a bridge over a river, highway bypasses, and a walking and bike path as well as environmental rehabilitation of riverbanks which had been cleared in the past. We provide background information on the need for a new bridge and the various governmental units involved, along with revenue and cost data, and a schedule for completing the various parts of the contract. You are asked to make multiple judgments related to the application of the guidance, including (1) whether the contract in question meets the requirements of a contract as specified in the guidance, (2) what the performance obligations embedded in the contract are, and (3) how revenue might be allocated to the performance obligations. You also must determine appropriate treatment for the changes to the contract and consider the possibility of acceleration of revenue recognition. The case is intended to make you aware that the application of the new guidance may require professional judgment in the face of ambiguous fact patterns and to provide them with experience in dealing with a more complex case than is typically provided in end-of-chapter problems.</p></div>","PeriodicalId":35578,"journal":{"name":"Journal of Accounting Education","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1016/j.jaccedu.2021.100726","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Accounting Education","FirstCategoryId":"1085","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0748575121000130","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"Social Sciences","Score":null,"Total":0}
引用次数: 0
Abstract
The revenue recognition standard, ASU No. 2014-09--codified as ASC 606 Revenue Recognition, which replaces in its entirety ASC 605 Revenue Recognition and amends several other sections of the codification--is significantly affecting revenue recognition in many industries, including the construction industry. An actual construction project inspired this case. The contract for the project included the construction of a bridge over a river, highway bypasses, and a walking and bike path as well as environmental rehabilitation of riverbanks which had been cleared in the past. We provide background information on the need for a new bridge and the various governmental units involved, along with revenue and cost data, and a schedule for completing the various parts of the contract. You are asked to make multiple judgments related to the application of the guidance, including (1) whether the contract in question meets the requirements of a contract as specified in the guidance, (2) what the performance obligations embedded in the contract are, and (3) how revenue might be allocated to the performance obligations. You also must determine appropriate treatment for the changes to the contract and consider the possibility of acceleration of revenue recognition. The case is intended to make you aware that the application of the new guidance may require professional judgment in the face of ambiguous fact patterns and to provide them with experience in dealing with a more complex case than is typically provided in end-of-chapter problems.
期刊介绍：
The Journal of Accounting Education (JAEd) is a refereed journal dedicated to promoting and publishing research on accounting education issues and to improving the quality of accounting education worldwide. The Journal provides a vehicle for making results of empirical studies available to educators and for exchanging ideas, instructional resources, and best practices that help improve accounting education. The Journal includes four sections: a Main Articles Section, a Teaching and Educational Notes Section, an Educational Case Section, and a Best Practices Section. Manuscripts published in the Main Articles Section generally present results of empirical studies, although non-empirical papers (such as policy-related or essay papers) are sometimes published in this section. Papers published in the Teaching and Educational Notes Section include short empirical pieces (e.g., replications) as well as instructional resources that are not properly categorized as cases, which are published in a separate Case Section. Note: as part of the Teaching Note accompany educational cases, authors must include implementation guidance (based on actual case usage) and evidence regarding the efficacy of the case vis-a-vis a listing of educational objectives associated with the case. To meet the efficacy requirement, authors must include direct assessment (e.g grades by case requirement/objective or pre-post tests). Although interesting and encouraged, student perceptions (surveys) are considered indirect assessment and do not meet the efficacy requirement. The case must have been used more than once in a course to avoid potential anomalies and to vet the case before submission. Authors may be asked to collect additional data, depending on course size/circumstances.
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