need all the criteiras to be fulfilled. example is on second page

Acctg 5110 Research Memo #1 Lanyard Company is preparing its 2016 financial statements. During 2016, the company purchased a building for $100,000, paid $20,000 as a down payment, and signed an $80,000 mortgage with First Bank. Lanyard's president, Tom Holly, is concerned about how to report this transaction on the company's statement of cash flows and has asked you to research the FASB's Accounting Standards Codification (ASC). Prepare a short memo to the president that summarizes how to report this transaction on the 2016 statement of cash flows Your grade will be based on the following criteria: 1. Identification of key issues 2. Inclusion of appropriate references and paragraph numbers from the FASB Codification. 3. Justification for and accuracy of your solution 4. Clarity and succinctness with which you communicate. The memos are limited to a single page and generally no longer than one or two paragraphs. Access to FASB website and the ASC: The School of Accounting has access through the American Accounting Association: http://www2.aaahq.org/ascLogin.cfm Username: AAA51230 Password: s33UYhH EXAMPLE: Great Pay Company is preparing for the new revenue recognition standard. The company sells and installs payroll software. They also provide optional cloud storage for their payroll data at an additional charge. The customer typically pays for the software and storage at the same time. Great Pay has already determined that they have two separate performance obligations, and have allocated the transaction price based on the relative standalone value. However, they have yet to determine when they should recognize revenue for the software and the storage. Research the ASC and prepare a short memo to the company with your conclusions. Answer: To: Great Pay Company From: A very knowledgeable accounting student RE: Revenue recognition According to ASC 606-10-25-23 An entity shall recognize revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service (that is, an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. ASC 606-10-25-25 states that one condition of control is using the asset to produce goods or provide services. Since the company has the ability to use the asset for these purposes, the revenue associated with the sale of the software should be recognized at the time of installation. According to ASC 606-10-25-27, one of the criteria for recognizing revenue over time is: The customer simultaneously receives and consumes the benefits provided by the entity's performance as the entity performs. Since providing storage is simultaneously received and consumed by the customer, the revenue associated with this performance obligation should be recognized over time