Why a kit

Capitalizing sales commissions under ASC 606 / ASC 340-40 is where a SaaS close meets judgment: which costs are incremental, whether renewal commissions are commensurate, how long the period of benefit is, when a churned customer triggers impairment, and what the footnote must say. The workbook computes the schedule. The kit is the documentation that has to sit behind it — the memo, the policies, the close procedure and the auditor package — drawn from the capitalization guide, the accrual entries guide and the clawbacks guide on this site.

What’s inside

  1. Technical Accounting Memorandum — template. Purpose and scope, background, issues, guidance (ASC 340-40-25, -35 and -50 with the TRG and Q&A materials), analysis prompts for each judgment — incremental costs, amortization period and pattern, the practical expedient, impairment, presentation, disclosure — conclusion, and an approvals block. Every fill-in is bracketed.
  2. Technical Accounting Memorandum — illustrative example. The same memo completed for a fictional SaaS company with Enterprise, Mid-Market and SMB plans, so the judgments have a worked model.
  3. Amortization-Basis Decision Framework. A six-step decision tree from “is it incremental?” to “has the expected timing changed?”, the evidence to retain at each branch, and a cohort worksheet for the estimated period of benefit that maps to the workbook’s Setup sheet.
  4. Clawback and Reversal Policy. One illustration ($6,000 commission, $459 employer tax, 36-month period) carried through five cases with journal entries.
  5. Month-End Close Procedure. Earned → accrued → capitalized → amortized → true-up → payout, a fully worked month, the identity capitalized cost = unamortized asset + cumulative amortization, and the review evidence to keep.
  6. Auditor PBC Package. An eleven-item request list with owners and frequency, a disclosure footnote template built on ASC 340-40-50-2 and 50-3, and a sample-selection tie-out sheet.
  7. The ASC 606 Commission Accrual Workbook — the same file sold separately.

How it was built

Every document is generated from the same source as the guides on this site and checked by a second, independent review for citation accuracy, arithmetic and language before release. Each carries the same footer: template for the company’s own accounting analysis; not accounting, tax or legal advice.