PwC's accounting podcast

In our Toolkit podcast series, we are taking a deep dive into one accounting topic each month that goes beyond the basics and into areas that require judgment. This month, we are covering each of the five steps in the revenue recognition model.In this episode, Heather Horn was joined by Angela Fergason and Mike Coleman, partners in PwC’s National Office, to discuss step four of revenue recognition: allocating the transaction price.In this episode, you will find:01:19 - The core objective of step four: allocating based on relative standalone selling price04:03 - Common approaches to estimating standalone selling price10:47 - How to apply the residual approach (for use in limited circumstances)15:03 - Special considerations for the allocation of discounts and variable consideration20:11 - The importance of consistency26:11 - Key tips about making judgments in your process of estimationWant to learn more? Listen to our previous Revenue toolkit episodes in which we discuss how to identify the contract, identify performance obligations, and determine the transaction price.Read chapter 5, Allocating the transaction price, in our Revenue from contracts with customers guide. Angela Fergason is a partner in PwC's National Office with over 20 years of experience who specializes in accounting for revenue and employee compensation arrangements. She also consults on a range of financial reporting issues impacting technology companies. Angela is a frequent speaker on accounting and financial reporting topics and is a contributor to many PwC National Office publications, including our accounting guides on revenue and stock-based compensation.Mike Coleman is a partner in PwC's National Office with over 30 years of experience. He specializes in accounting for revenue and software arrangements. Prior to his time in National, Mike was an audit partner in the firm's NY Metro assurance practice serving technology clients. In addition, he has been one of the firm's represented the firm on the AICPA Software Task Force. Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.

In our Toolkit podcast series, we are taking a deep dive into one accounting topic each month that goes beyond the basics and into areas that require judgment. This month, we are covering each of the five steps in the revenue recognition model.In this episode, Heather Horn was joined by Angela Fergason and Alexandra Pascu from PwC’s National Office, to discuss step three of revenue recognition: determining the transaction price.In this episode, you will find:3:18 - Determining whether the contract contains significant financing components7:52 - How noncash and variable consideration impact the transaction price12:32 - Methods for estimating variable consideration, and considering the measurement constraint19:54 - The key judgments needed for service level agreements or similar arrangements24:54 - Evaluating payments to customers as a form of variable consideration, and how they impact the transaction price26:58 - Key takeaways: step three in a nutshell, and additional resourcesWant to learn more? Read the Determining the transaction price chapter in our Revenue guide.Listen to our previous podcasts on Variable consideration: How it impacts your top and bottom line and Payments to customers? Receipts from vendors? Help!.Angela Fergason is a partner in PwC's National Office with over 20 years of experience who specializes in accounting for revenue and employee compensation arrangements. She also consults on a range of financial reporting issues impacting technology companies. Angela is a frequent speaker on accounting and financial reporting topics and is a contributor to many PwC National Office publications, including our accounting guides on revenue and stock-based compensation.Alexandra Pascu is a director in PwC’s National Office with over 9 years of experience. She focuses on revenue recognition, software costs, stock-based compensation, and inventory. Prior to this role, Alexandra  led audits of companies ranging from small emerging growth companies to public multinationals.Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.

PwC’s accounting podcast became a book club this week as Heather Horn was joined by Matt Mani and Paul Leinwand of PwC's Strategy&—co-authors of the book: Beyond Digital: How Great Leaders Transform Their Organizations and Shape the Future. Together they discuss seven imperatives of leadership that have enabled successful large-scale business transformations, and the lessons that today’s finance organizations can learn from these transformations.In this episode, you will hear:4:40 - The leadership imperatives that companies should focus on, including how they can begin to reimagine their place in the world and create value via ecosystems16:06 - What it means to build a system of privileged insights with customers and how it helps to make your organization outcome-oriented20:42 - Reinventing engagement and the social contract with your people to address emerging challenges, such as the great resignation26:16 - Inverting the focus of organizational leadership to drive transformation in a dynamic and collaborative way30:48 - Disrupting your own leadership to grow your skill sets and begin change from within38:02 - Key lessons to jumpstart your overall transformationWant to learn more? The Beyond Digital landing page has links to additional resources, reviews, and where to find the book.Matt Mani is a partner for PwC’s Strategy& consulting practice. With over 29 years of experience, he focuses on helping companies achieve business model, cost, and performance transformations. He is the co-author of the book Beyond Digital: How Great Leaders Transform Their Organizations and Shape the Future, and multiple articles in Harvard Business Review and Strategy+business magazine.Paul Leinwand is a thought leader on strategy, growth, and capability building for PwC’s Strategy& consulting practice. With over 24 years of experience, he has authored numerous books, as well as articles in the Harvard Business Review and Strategy+business magazine. He currently teaches at Kellogg School of Management as an Adjunct Professor of Strategy.Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.

In our Toolkit podcast series, we are taking a deep dive into one accounting topic each month that goes beyond the basics and into areas that require judgment. This month, we are covering each of the five steps in the revenue recognition model.This week Heather Horn was joined by Angela Fergason and Mike Coleman, partners in PwC’s National Office, to discuss revenue step two: identifying the performance obligations. Angela and Mike share the key points to consider carefully, especially because this step dictates the units of account for the entire contract.In this episode, you will hear:4:57 - How to find all relevant promises to the customer, and how to treat implied promises9:29 - The criteria utilized to assess whether a good or service is “distinct”16:30 - How to account for promises to transfer a series of distinct goods or services22:05 - How to treat a customer’s option to purchase additional goods or services 27:20 - How selling a “solution” may comprise multiple performance obligations, and other key final remindersWant to learn more? Read chapter 3, Identifying performance obligations, in our Revenue from contracts with customers guide.Angela Fergason is a partner in PwC's National Office with over 20 years of experience who specializes in accounting for revenue and employee compensation arrangements. She also consults on a range of financial reporting issues impacting technology companies. Angela is a frequent speaker on accounting and financial reporting topics and is a contributor to many PwC National Office publications, including our accounting guides on revenue and stock-based compensation.Mike Coleman is a partner in PwC's National Office with over 30 years of experience. Mike specializes in accounting for revenue and software arrangements and has served technology clients for much of his career. In addition, Mike has represented the firm on the AICPA Software Task Force. Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.

In our Toolkit podcast series, we are taking a deep dive into one accounting topic each month that goes beyond the basics and into areas that require judgment. This month, we are covering each of the five steps in the revenue recognition model.In this episode, Heather Horn was joined by Angela Fergason and Pat Durbin, partners in PwC’s National Office, to discuss step one of revenue recognition: identifying the contract. While it may appear straightforward, there are some judgments to be made and getting it right is critical for the rest of the revenue recognition process.In this episode, you will find:03:10 - Determining the applicability of accounting guidance for each arrangement12:19 - The five criteria that determine whether a contract exists for accounting purposes15:28 - Collectibility considerations22:10 - What to do if the criteria for contract existence are met after the initial assessment24:38 - How enforceable rights and obligations, rather than a stated term, dictate the contract term29:49 - Key takeaway: the importance of not taking shortcuts through the step one assessmentWant to learn more? Read Chapter 2 of our Revenue guide on scope and identifying the contract.Angela Fergason is a partner in PwC's National Office with over 20 years of experience who specializes in accounting for revenue and employee compensation arrangements. She also consults on a range of financial reporting issues impacting technology companies. Angela is a frequent speaker on accounting and financial reporting topics and is a contributor to many PwC National Office publications, including our accounting guides on revenue and stock-based compensation.Pat Durbin is a partner in PwC’s National Office and has over 30 years of experience. He has expertise in financial reporting and extensive experience serving board, C-suite, and senior management level executives across a variety of industries and geographies both in the US and internationally.Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.

In each episode of our Year-end toolkit series, you’ll find something relevant to the year-end reporting process.This week Heather Horn was joined by Michael Mullen, PwC’s US Trust Solutions Quality Management leader, to discuss the SEC’s guidance on financial statement materiality and error evaluations.In this episode you’ll hear them discuss:1:25 - What’s changed since the SEC staff issued its accounting bulletin (SAB 99) in 1999, and what’s the same8:45 - Some “common sense” qualitative factors that should be considered10:35 - Evaluating the impact of errors on consensus estimates, analyst expectations, and balance sheet-related covenants18:01 - The dynamics of management compensation and involvement of upper management in intentional misstatements21:01 - How to perform a quantitative evaluation, and the differences between a restatement and a revision38:17 - The general presumption of a material weakness in cases of restatement41:02 - Managing the misstatement evaluation process and the recent reminders from the SEC staffWant to learn more? Listen to our previous podcasts in the Year-end toolkit series, Reminders from PwC’s National Office, Statement of cash flows, and Resolving complex issues.Michael Mullen is PwC’s US Trust Solutions Quality Management leader. In this role he oversees complex client issues, providing technical insights and expertise in support of overall quality. With over 30 years of client service experience, Michael has led numerous global client engagements.Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.

In each episode of our Year-end toolkit series, you’ll find something relevant to the year-end reporting process.This week Heather Horn was joined by Gerry Flynn, PwC’s National Office leader, to discuss a topic that can be a source of stress for preparers during the relatively short time between year end and year-end reporting: how to manage issues to resolution effectively.In this episode you’ll hear them discuss:3:12 - The importance of a defined escalation protocol6:06 - Taking emotion out of the process12:06 - The importance of a thorough assessment18:30 - Managing CFO and audit committee expectations23:02 - When to involve auditors31:10 - Control implications and performing an effective “post-mortem”Gerry also shares his perspective on managing through the current COVID-19 variant surge, and the need for contingency plans during this time.Want to learn more? Listen to our previous podcasts in the series, Year-end toolkit: Reminders from PwC’s National Office and Year-end toolkit: Statement of cash flowsGerry Flynn is the leader of PwC’s National Office, overseeing the firm’s accounting, auditing, SEC, and other quality-related specialists. Prior to joining the National Office, Gerry spent nearly 30 years serving many of the firm’s largest clients in diverse industries, from entertainment and professional sports to life sciences, biotech, and pharmaceuticals.Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.

In each episode of our Year-end toolkit series, you’ll find something relevant to the year-end reporting process.This week Heather Horn was joined by Chris Gerdau and Suzanne Stephani from PwC’s National Office to talk about key reminders on the statement of cash flows that preparers will want to keep in mind as they finalize their reporting.In this episode you’ll hear them discuss:2:39 - Cash, cash equivalents, and restricted cash7:26 - Gross versus net presentation9:28 - Non-cash transactions13:07 - Business combinations and asset acquisitions20:23 - Equity issuances22:16 - PP&E purchases24:58 - Equity method investee distributions29:49 - Leases31:47 - Foreign operationsWant to learn more? Listen to our podcast Full disclosure: The statement of cash flowsFor more year end reminders, read or listen to The quarter close - fourth quarter 2021Suzanne Stephani is a director in PwC’s National Office specializing in the application and interpretation of the accounting guidance related to financing and leasing transactions as well as the cash flow statement.Chris Gerdau is a partner in PwC’s National Office specializing in accounting for financial instruments and banking related topics. Chris also conducts technical reviews of SEC filings and provides technical support to PwC’s practice offices. With over 25 years of experience, Chris’s client service expertise includes the banking, capital markets, and insurance industries.Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.

In our Talking ESG podcast series, we give an end-to-end look at what it takes to build effective ESG reporting in today’s environment. From investor to stakeholder expectations, from global frameworks to data, process, and controls—there’s something in it for everyone.This week Heather Horn sat down with Brigham McNaughton, a managing director in PwC’s ESG practice, to discuss a topic that’s top of mind for many preparers: data quality and the processes needed to produce investment-grade ESG reporting.Topics include:1:43 - What is the current state of data quality? As ESG reporting becomes more prevalent, the ability to produce quality data has become a necessity. Brigham gives listeners an overview of the questions companies face and how they can go about taking stock of the maturity level of their processes.8:45 - The challenges of ESG disclosures. Brigham and Heather discuss some of the challenges of ESG reporting and how to move forward when you can’t get to the right data.  For companies that are at an early stage of process maturity, it is often more efficient to address data quality on the front end before deciding what to report.17:46 - What are some best practices? Brigham shares some practices he has observed while working with various companies, including what the leaders in this space are doing. He covers how to identify a team, set up processes, and even appropriate governance.30:48 - What departments should be involved? There are many ways to advance the quality of data in ESG reporting. Brigham explains which departments often have a hand in helping move the needle on data quality.41:19 - Key takeaways. Brigham and Heather discuss some practical advice for listeners as they begin or continue to evolve their ESG processes. Want to learn more?Listen to our previous podcasts in this series, Talking ESG: Evolving your reporting for impact, Talking ESG: How SEC proposals may shape future reporting, and Talking ESG: How new EU rules may impact your reporting.Brigham McNaughton is a managing director in PwC’s ESG practice. He has served global clients in a range of industries including utilities, automotive, and financial services, advising on core ESG strategy development and stakeholder engagement. Brigham has worked closely with the Sustainability Accounting Standards Board (SASB) on a variety of reporting initiatives.Heather Horn is a Deputy Chief Accountant in PwC’s National Office and leader of the thought leadership group, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.

In each episode of our What’s trending in SEC comments series, our guests bring you the latest themes in comment letters from the SEC’s Division of Corporation Finance for the most common topical areas of financial reporting.This week we focus on non-GAAP measures. Kyle Moffatt, a partner in PwC’s National Office, joined Heather Horn to break down some of the questions raised in these comments, giving you a deeper understanding of the SEC staff’s expectations, as well as context and insights into the non-GAAP rules.Topics include:1:35 - Background on non-GAAP measures. Disclosing non-GAAP measures is a common way companies supplement their financial statement disclosures to further tell the story of their businesses. Kyle gives some helpful background and examples of some commonly utilized measures.8:57 - Presenting non-GAAP measures. There can be pitfalls associated with these alternative measures. Kyle and Heather discuss what issuers should keep in mind when deciding how to present them.22:30 - What types of comments are companies receiving? Kyle discusses the main themes of the SEC staff’s non-GAAP comments. Common questions relate to prominence relative to GAAP metrics, the reconciliation of each non-GAAP metric to GAAP, and the appropriateness of adjustments, among others.27:43 - Key takeaways and reminders. We close with some future areas to pay attention to and helpful advice for year-end reporting. Heather tries to stump Kyle with some niche accounting and pop culture questions.Want to learn more?Listen to our previous comment letter podcasts on MD&A, Debt, warrants, and equity, Revenue, Goodwill, Inventory and cost of sales, and Segment reportingListen to What you missed at the 2021 AICPA ConferenceIn the loop: To GAAP or to non-GAAP COVID-19: What you should knowSee our overview of SEC Comment Letter TrendsStaff Accounting Bulletin Topic 11 BSEC Non-GAAP Financial Measures: Questions and Answers of General ApplicabilityKyle Moffatt is a partner in PwC's National Office where he consults with engagement teams and audit clients on SEC reporting matters. He joined PwC in April 2020 after spending almost 20 years with the SEC.Transcripts available upon rDid you enjoy this episode? Text us your thoughts and be sure to include the episode name.