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Technical accounting guides

Direct answers to the questions controllers actually ask — ASC-referenced, with worked examples and journal entries. Each one can be re-run live in ResearchIQ with page-level citations.

How do you account for a lease modification under ASC 842?

An added right of use at the standalone rate is a separate lease; other modifications remeasure the liability at the new rate and adjust the ROU asset.

ASC 842LeasesLease modifications
How do you build a purchase price allocation under ASC 805?

Consideration at fair value, identifiable assets and liabilities at fair value, deferred taxes on the step-up, goodwill as the residual. Worked example.

ASC 805Business combinationsPurchase accounting
Debt modification or extinguishment under ASC 470-50: how do you decide?

A 10%+ change in present value at the original effective rate is an extinguishment; smaller is a modification. Worked 10% test with fees and entries.

ASC 470-50Debt10% cash flow test
What do auditors expect in a technical accounting memo?

Auditors expect a stated issue, sourced facts, quoted guidance applied to the facts, alternatives rejected with reasons, and schedules that tie.

Technical memosAudit readinessDocumentation
Can you use ChatGPT for technical accounting research?

Yes, for orientation and drafting, not conclusions: open and verify every ASC citation, check effective dates, and keep deal terms out of consumer tools.

AI researchCitationsConfidentiality
How do you account for sales commissions under ASC 340-40?

Incremental sales commissions are capitalized under ASC 340-40 and amortized over the period of benefit — including renewals when renewal commissions are not commensurate. Worked example with journal entries.

ASC 340-40RevenueContract costs
How are profits interest units treated in a business combination?

Whether target-company profits interest units are consideration transferred or post-combination compensation under ASC 805 turns on what the payment is for — with continued employment the decisive factor.

ASC 805Business combinationsShare-based payment
How do the five steps of ASC 606 apply to investment advisory fees?

Advisory fees are variable consideration from a single stand-ready performance obligation satisfied over time. How the five-step model applies to AUM-based fees billed in advance or arrears.

ASC 606RevenueAsset management