Assume you are a staff accountant focusing on revenue
recognition at Chick-fil-A. Chick-fil-A
is an American based fast found chain.
Chick-fil-A recently hired a new Accounting Manager, to which you will
report, who is unfamiliar with the fast food industry. Your new manager has asked you to update the
company’s files on some important issues related to revenue recognition so that
the company can ensure it is accounting for its loyalty programs and gift cards
appropriately.
Your
task is to perform research in the FASB’s Accounting Standards Codification and
write a Technical Memo
answering two questions. First, how the company’s loyalty program
(Chick-fil-A One) impacts revenue recognition.
Second, when revenue should be recognized related to the company’s sale
of gift cards. Your Technical Memo should answer these question by
referencing appropriate ASC guidance and applying the specific facts of this
transaction.
Your manager is
very “tech savvy” and wants you to use Artificial Intelligence to facilitate
your research and preparation of the memo.
Technical Memo Format:
· Length: Your write-up should be no more than 3 pages in length (It can be shorter
than this as long as you accomplish all of the objectives)
· Spacing: Single-spaced
· Font size and Style: 12 point Times New Roman
· Margins: One-inch on all sides
· Cover Sheet: A cover sheet is NOT necessary.
· References: A
reference page is not necessary if you only cite the ASC.
· You
should only use the Accounting Standards Codification (ASC) and the resources
that I suggest to you for this assignment. No other “research” is necessary or
encouraged.
o
Your textbook is not an appropriate
source to cite in this assignment. You can use it to get comfortable with the
topic before doing research, but your decisions and references should be based
on the Accounting Standards Codification.
·
An appropriate
in-text reference to the ASC is generally in the following format:
XXX-XX-XX-XX. The first time you reference a topic and subtopic (XXX-XX) in
your memorandum, it is helpful to use words to describe the topic and subtopic.
For example, “ASC 605–45 (Revenue Recognition—Principal Agent Considerations)”. This is
also a good reasonableness check for you. If the topic and subtopic do not
match the issue at hand, you probably have the wrong research!
·
It is typically appropriate to include the
relevant guidance directly in your technical memo.
