Audit and Accounting Guide: Investment Companies

Appendix K Asset Management

This appendix is nonauthoritative and is included for informational purposes only.

Notice to Readers

The material in this appendix is from chapter 4, “Asset Management” of the AICPA Audit and Accounting Guide Revenue Recognition (Revenue Recognition guide). The paragraph numbering from the Revenue Recognition guide has been retained. This appendix presents accounting implementation issues developed to assist management of asset management entities in applying FASB Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, and related interpretations from the FASB/IASB Joint Transition Resource Group for Revenue Recognition (TRG).

The AICPA Asset Management Revenue Recognition Task Force identified and developed these accounting implementation issues, and the AICPA Revenue Recognition Working Group and AICPA Financial Reporting Executive Committee (FinREC) approved them. They are a source of nonauthoritative accounting guidance for nongovernmental entities.

The accounting implementation issues have been organized within this appendix as follows:

•     In relation to the five-step model of FASB ASC 606, when applicable:¹

—     Step 1: “Identify the contract with a customer,” starting at paragraph 4.1.01

—     Step 2: “Identify the performance obligations in the contract,” starting at paragraph 4.2.01

—     Step 3: “Determine the transaction price,” starting at paragraph 4.3.01

—     Step 4: “Allocate the transaction price to ...