A finished ACC-682 Topic 2 backlog extraction workpaper example, building remaining performance obligations of $63.4 million from contract data, excluding unenforceable terms and reconciling the roll-forward to revenue in the ledger. Searches like "acc 682 topic 2 assignment example", "acc682 topic 2 sample" and "acc-682 topic 2 example" land here.
What a finished ACC-682 Topic 2 backlog extraction workpaper looks like
The finished workpaper starts from the disclosure it feeds, the transaction price allocated to obligations not yet satisfied and when it is expected to become revenue, all figures illustrative. The ledger holds none of that, so the extract joins the billing system's subscription table to its amendment history for 4,812 active contracts, keeping only the latest version of each. Two exclusions follow. The sales system shows 118 contracts terminated but still active in billing, worth $1.4 million, and 212 contracts allow termination on 30 days' notice without penalty, so only the notice period counts as enforceable. The roll-forward then ties: $61.0 million opening, plus $38.4 million of bookings, less $33.9 million recognized and $2.1 million of downsells, gives $63.4 million, of which $39.8 million is expected within twelve months.
How an ACC-682 Topic 2 example is structured
The workpaper runs from source to disclosure in the order a reviewer would retrace it. It opens with the reporting requirement and the reason the ledger cannot answer it, since revenue accounts record what has been earned, not what customers have committed to. A source section names each table used, its owner and the fields drawn, and explains how amendments are stored as new rows rather than overwritten. The extraction logic follows as numbered steps, each with the contract count after it. The exclusions section documents both judgments, the terminated contracts found by comparing systems and the short enforceable term on contracts with free cancellation. The reconciliation comes next, tying revenue recognized from these contracts, plus $2.3 million of usage fees excluded under an optional exemption, to $36.2 million in the ledger. The draft note table and its timing bands close the workpaper.
Why the ledger cannot answer
Revenue and receivable accounts record what has been earned or billed, so the committed but unrecognized amounts the note needs exist only in contract data.
Amendment history collapsed to current terms
Each subscription can carry several amendment rows, and the extract keeps only the latest effective version, so superseded terms are not counted beside the terms that replaced them.
Two systems compared for terminations
Matching billing records to the sales system finds 118 contracts ended by customers but never closed in billing, and their $1.4 million is removed.
Enforceable term, not stated term
Contracts that customers can end on 30 days' notice without penalty count only for the notice period, since no enforceable rights extend past it.
The roll-forward tied to revenue
Opening backlog plus bookings, less recognized revenue and downsells, reaches $63.4 million, and the recognized figure agrees with the ledger once usage fees are added.
Where marks go in ACC-682 Topic 2
A backlog figure pulled from the billing system with no reconciliation is where this workpaper loses the most, since nothing shows that the extract covers every contract or counts each once. Papers that sum every amendment row count superseded terms beside current ones and overstate the disclosure. Stated contract terms used without reading cancellation clauses report commitments the customers never made enforceable. Terminated contracts left in the figure because billing still lists them are a common miss, and only a comparison between systems finds them. Some papers build a clean extract and never reach the note, reporting a total without the timing explanation the disclosure calls for. The exclusion of usage fees costs credit when it is applied without stating the optional exemption relied on, because a reader is entitled to know which amounts are missing and why.
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ACC-682 Topic 2 questions, answered
What are remaining performance obligations?
The portion of the transaction price in existing contracts that has not yet been recognized as revenue, because the goods or services have not yet been delivered. ASC 606 asks companies to disclose that amount and when they expect to recognize it, using time bands or a qualitative explanation. For a subscription business it is often the nearest disclosed measure of contracted future revenue.
Why does a cancellation clause shorten the contract?
Under ASC 606 the contract term is the period in which both parties have enforceable rights and obligations. If a customer can walk away on 30 days' notice without a substantive penalty, the months beyond that notice period are not enforceable, however long the stated term. Counting them would disclose commitments the company cannot compel, so the workpaper limits those contracts to the notice period.
Why are usage fees left out?
Because the standard offers optional exemptions from this disclosure, including for certain variable consideration allocated entirely to performance obligations not yet satisfied, and many usage-based fees fall within them. A company electing an exemption must say so and describe what was excluded. The workpaper records the $2.3 million recognized from usage fees in the reconciliation so the omission from backlog is visible, not silent.