Audit and Accounting Guide

Chapter 5 Brokers and Dealers in Securities

Notice to Readers

This chapter presents accounting implementation issues developed to assist management of broker-dealer 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 Brokers and Dealers in Securities 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 chapter as follows:

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

—     Step 1: "Identify the contract with a customer"

—     Step 2: "Identify the performance obligations in the contract"

—     Step 3: "Determine the transaction price"

—     Step 4: “Allocate the transaction price to the performance obligations in the contract"

—     Step 5: "Recognize revenue when (or as) the entity satisfies a performance obligation"

•     By revenue stream, starting at paragraph 5.6.01

•     As other related topics, starting at paragraph 5.7.01

The following table outlines the accounting implementation issues discussed in this chapter:

Issue Description	Paragraph ...