Write a technical accounting memo on revenue recognition
Applies the five-step revenue model to a contract and drafts a position memo with judgments, alternatives, and open questions.
The prompt
Help me write a technical accounting memo on how to recognize revenue for a contract or arrangement.
Framework: [ASC 606 / IFRS 15]
Contract or arrangement summary: [PASTE key terms - parties, products/services, pricing, payment terms, discounts, rebates, refunds, renewals, termination rights, acceptance clauses]
Business context: [how this deal differs from our standard contracts, if it does]
Proposed treatment (if any): [WHAT we think the answer is]
Who will read this: [controller / auditors / audit committee]
Work through the five steps:
1. Identify the contract (including whether contracts should be combined).
2. Identify performance obligations - are the promises distinct?
3. Determine the transaction price, including variable consideration, constraints, significant financing components, and consideration payable to the customer.
4. Allocate the price (standalone selling prices and how they were estimated).
5. Recognize revenue - over time or at a point in time, and the measure of progress.
Also consider principal vs. agent, contract modifications, and contract costs where relevant.
Return a memo with: Background, Issue(s), Analysis by step (with the contract terms that drive each conclusion), Alternatives considered and why rejected, Conclusion, Illustrative journal entries, Disclosure considerations, and Open items.
Rules: don't quote standard paragraph numbers you aren't sure of - write [CITE PARAGRAPH] instead. Mark judgment calls clearly. This is a draft for review by a qualified accountant and our auditors, not a final position.
Highlighted [brackets] are blanks to replace with your own details.
Fill in the blanks and use this promptMore Finance & Accounting prompts
What to fill in
- ASC 606 / IFRS 15
- how this deal differs from our standard contracts, if it does
- WHAT we think the answer is
- controller / auditors / audit committee
- CITE PARAGRAPH
How this prompt is built
This prompt follows the RTF structure (Role, Task, Format). RTF tells the model who to be, what to do and what shape the answer should take. It is the quickest structure that still gives noticeably better results than a bare request.
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