You are the Manager of Financial Reporting for your company. Your company is facing a number of reporting challenges as a result of an acquisition, COVID-19 and other activities. Although the CFO makes the final decision on accounting standard applications, the CFO relies heavily on your expertise (acquired in the Aurora University MSA program) and your years of research and experience.

In a meeting (brainstorming session), a list of potential reporting issues is developed and are listed below. You have been asked to select the three you feel may be most important and prepare a memo to be reviewed and to guide proper accounting treatment for each.

Your memo should include:

Organization-Appears neat and organized; logical; no spelling or grammar errors; guides the reader to the point(s).

Facts/Issues-States area being reviewed and identifies importance (issue) to a company.

Applicable Literature-Identifies all applicable literature. It is properly linked to the issue noted above. Citations are to adequate depth that it represents support, not the start of a new search. Please remember, some areas have guidance in more than one area of ASC. Some topics have conflicting direction. These should all be identified.

Remember as you prepare your memo to be complete but concise. Like most executives, the CFO has the attention span of an ant. Your goal is to get the key points summarize and supported, having a significant impact on the decision-making process.

Here is the list of topics developed in the brainstorming session:

1. Balance Sheet classifications
2. Valuation of Assets and Liabilities in an acquisition
3. Valuation accounts
4. Impairment of long-term assets
5. Contingent liabilities
6. Non-recurring items
7. Cash flow impact of refinancing
8. Related party transactions
9. Revenue recognition-over time (maintenance agreement)
10. Principal/Agent definition

You can answer any three BUT your answers must be in numerical order (eg. 4, 7, 10). DO NOT submit your answers out of order (eg. 7, 4 , 9).