Contemporary Topics

Marvelous Marketers

RoMM No RoMM Description RoMM – Facts of Case Assertion Identified/Addressed
1 Contract modifications are not identified and accounted for correctly.
  • Verbal agreement between MM & Stone.
  • Terms and conditions are unidentifiable due to contract being verbal.
Rights and obligations
2 All promised goods or services are not properly identified in the contract or promised goods and services in the contract are not distinct, causing revenue to be recorded in the wrong period.
  •  All promised goods/services are NOT distinct, causing revenue to be potentially recorded in the wrong period

Cut Off

3 Revenue is inappropriately recognized for consignment sales before transfer of control has occurred in accordance with the contract terms. Existence & Cutoff
4 The transaction price has not been allocated to performance obligations on a relative stand-alone selling price basis. Accuracy
5 The fixed consideration identified in the transaction price of the contract is identified at the incorrect amount or does not meet the definition of fixed consideration.
6 Revenue is recognized when a contract (as defined by ASC 606- 10-25-1) does not exist. Existence
7 The amount of variable consideration is recorded at an incorrect amount.
8 Service-type warranties are not appropriately identified as separate performance obligations.
9 Licensing arrangements when the entity receives consideration from a customer (e.g., in the form of a sales- or usage-based royalty) are recorded incorrectly