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1. write a dissection "memo" like 

that address the new  Revenue Recognition

8 . Read the following issue. Next, add an ellipsis to par. 15-2 to reflect the removal of any guidance not considered relevant to this issue. Issue: Presto Hospitality is researching the interaction between ASC 842 (Leases) and ASC 606 (Revenue). Presto wants to know whether it must evaluate ASC 606 for any contracts that it concludes are within the scope of leasing guidance. Presto reviews the following scope guidance in ASC 606-10: 15-2 An entity shall apply the guidance in this Topic to all contracts with customers, except the following:  

a. Lease contracts within the scope of Topic 842, Leases. 

 b. Contracts within the scope of Topic 944, Financial Services—Insurance.

 c. Financial instruments and other contractual rights or obligations within the scope of the following Topics:

1. Topic 310, Receivables 

2. Topic 320, Investments—Debt and Equity Securities  

2a. Topic 321, Investments—Equity Securities 

3. Topic 323, Investments—Equity Method and Joint Ventures  

4. Topic 325, Investments—Other  

5. Topic 405, Liabilities 

6. Topic 470, Debt  

7. Topic 815, Derivatives and Hedging

 8. Topic 825, Financial Instruments 

 9. Topic 860, Transfers and Servicing

d. Guarantees (other than product or service warranties) within the scope of Topic 460, Guarantees. 

 e. Nonmonetary exchanges between entities in the same line of business to facilitate sales to customers or potential customers. For example, this Topic would not apply to a contract between two oil compa-nies that agree to an exchange of oil to fulfill demand from their customers in different specified loca-tions on a timely basis. Topic 845 on nonmonetary transactions may apply to nonmonetary exchanges that are not within the scope of this Topic

4.5. Presto Hospitality—Revenue Recognition Assume Presto concludes that its concession agreement with Stadium Co. is not a lease. In that case, apply the five-step revenue process in ASC 606 to this arrangement. Assume you are evaluating appropriate revenue recognition for the contract and for individual transactions that will arise within the scope of the contract (for example, a sale of a hot dog to a customer in the stadium). Assume a hot dog retails for $6, of which Presto retains 50%.

4.6 Baseball Suites—Lease Evaluation The New York Yankees offer multiyear luxury suite licenses to customers, including 3-, 5-, and 10-year licenses. Customers who sign these license agreements have the right to use a specified suite in the stadium (say, suite no. 25) for the dates specified in the license agreement. Alternatively, customers with a more limited interest or budget can sign up for a partial season (a 20- or 41-game plan) where the customer can specify which games it wishes to view from the suite. While the customer is enjoying the suite, a third-party concessionaire (similar to Presto’s role) will provide premium food and beverage service to guests in the suite. Evaluate—is a suite license a lease? Assume a customer signs a 20-game license for specified games to occur within a single Major League Baseball season

4.7 Sales Commissions, Writing an Email Assume the New York Yankees pay its sales staff a 2% sales commission on each luxury suite license contract signed (such as by a corporate customer). Research whether this commission payment should be reported as an asset or an expense by the New York Yankees. Craft your response in the form of an email, and assume you’re responding to a question asked to you by the accounting manager for the Yankee

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