Before You Start

This guide assumes you have access to the FASB Accounting Standards Codification and a strong understanding of US GAAP.

Overview

50 min
Estimated Time
Expert
Difficulty
As Needed
Frequency

What You’ll Learn

  • How to structure your technical accounting memo effectively
  • Strategies for navigating the FASB Codification
  • Techniques for identifying and applying relevant GAAP
  • Best practices for documenting judgments and conclusions for audit readiness

1. Preparation Steps

Gather these resources before you begin your research:

Required Resources

  • Access to the FASB Accounting Standards Codification
  • Company’s accounting policies and procedures
  • Relevant contracts or agreements pertaining to the issue
  • Financial statements and related disclosures

Recommended Tools

  • Word processor or memo template
  • Flowcharting software (for complex transactions)
  • Prior research memos (for reference on similar issues)

2. Key Memo Components

There are two primary approaches to documenting your accounting research.

Approach A: The Formal Technical Memo

This is the comprehensive, audit-ready document.

Pros:
  • Comprehensive and defensible.
  • Essential for complex issues.
  • Audit-ready documentation.
Cons:
  • Time-consuming to prepare.
  • Requires deep research.
  • Can be overkill for simple items.

Approach B: Informal Research Notes/Analysis

This is a quicker, less formal documentation.

Expert Tip: For any issue that is material, involves significant judgment, or could be contentious during an audit, we strongly recommend preparing a formal technical accounting memo. It provides crucial support for your financial reporting positions.

3. Step-by-Step: Research Workflow

Here is the high-level workflow for conducting thorough technical accounting research.

Here is a sample code block to show how an API call might look.

{
  "research_topic": "Revenue Recognition for SaaS",
  "issue_date": "2025-01-15",
  "references": [
    "ASC 606-10-25",
    "ASC 606-10-55"
  ]
}

4. Structuring Your Memo

  1. 1

    Executive Summary

    Provide a brief overview of the issue, the conclusion, and key takeaways for quick understanding.

  2. 2

    Background/Facts

    Clearly state the specific facts of the transaction or event, including relevant dates and parties involved.

  3. 3

    Applicable GAAP

    Identify and summarize the relevant FASB Codification sections and other authoritative literature that apply to the issue.

  4. 4

    Analysis and Conclusion

    Apply the identified GAAP to your specific facts, discuss any alternatives considered, explain your judgments, and state your final accounting treatment.

Common Error: Insufficient Support

Always cite the exact FASB Codification paragraphs and provide clear, logical explanations of how they apply to your specific facts. Avoid vague references or unsupported assertions.

5. Review and Finalization

Memo Review Checklist

  • Clarity and conciseness of language
  • Accuracy of facts and GAAP citations
  • Completeness and objectivity of analysis
  • Defensibility of the final conclusion
  • Grammar, spelling, and adherence to company format

Need Help?

Get Expert Review

Struggling with a complex accounting issue or need a second opinion on your research? Our team of GAAP experts can provide guidance and review your memos.

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