Financial guarantees are contractual agreements where one party assumes responsibility for a specified obligation of another party if the latter party fails to fulfill its obligation. ASC 460-10, Guarantees - Overall, provides guidance on accounting for financial guarantees and recognizing the associated liabilities. This article explains financial guarantee liability transactions under ASC 460-10, along with illustrative journal entries.
Real estate transactions are significant events for both buyers and sellers, often involving large sums of money and long-term commitments. ASC 360-20, Property, Plant, and Equipment - Real Estate Sales, provides guidance on accounting for real estate sales and the recognition of profit in such transactions. This article explains profit recognition under ASC 360-20, along with illustrative journal entries.
In today's technology-driven business environment, internal-use software is increasingly essential for improving efficiency and productivity. ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software, provides guidance on accounting for the costs associated with developing or obtaining internal-use software. This article explains the capitalization of development costs for internal-use software under ASC 350-40, along with illustrative journal entries.
Accounting Standards Codification (ASC) 718-20, "Stock Compensation – Employee Stock Purchase Plans," governs the accounting treatment for employee stock purchase plans (ESPPs) in the United States. ESPPs are a popular form of equity compensation that allow employees to purchase company stock at a discount through payroll deductions. This article explains the key provisions of ASC 718-20, its application, and the relevant journal entries for stock purchase transactions under ESPPs.
Accounting Standards Codification (ASC) 310-10, Receivables - Overall, provides guidance on the accounting treatment of factoring receivables transactions. Factoring is a financial transaction in which a company sells its accounts receivable to a third party, called a factor, in exchange for immediate cash. This standard is crucial for entities that use factoring arrangements to manage their cash flow, as it ensures consistent accounting treatment for these transactions. In this article, we will discuss the key aspects of ASC 310-10 and provide examples of journal entries to illustrate the accounting treatment of factoring receivables transactions.