Industry Overview .01-.46
Gaming in the United States .01-.24
Casino Gaming .01-.09
Native American Gaming .10-.11
Lotteries .12-.16
Other Gaming .17-.24
Regulation and Oversight .25-.37
Brief Descriptions of the Games .38-.46
Table Games .39
Card Games .40
Slot Machines .41-.42
Keno .43
Bingo .44
Race and Sports Betting .45
Online Real Money Gaming .46
2 Guide Scope and Applicability .01-.04
3 Overview of Gaming and Gaming Related Revenue .01-.42
Introduction .01-.13
Overview of Transactions in the Casino and the Casino Cage .14-.42
Overview of Table Game Transactions .14-.32
Overview of Incentive Programs in the Gaming Industry .33-.42
4 Jackpot Liabilities .01-.10
Background .01
Summary of Selected Accounting Literature .02
Types of Jackpots for Purposes of Accounting for Jackpot Liabilities .03-.07
Accounting for Jackpots .08-.10
5 Participation and Similar Arrangements .01-.09
Background .01-.03
Summary of Selected Accounting Literature .04
Analysis of Lease Criteria for Various Pricing Arrangements .05
Conclusions and Income Statement Presentation .06-.09
6 Loyalty and Incentive Programs .01-.29
Summary of Selected Accounting Literature .01
General Description of, and Accounting for, Loyalty and Incentive Programs .02-.12
Section Paragraph
6 Loyalty and Incentive Programs—continued Discretionary Incentive Programs .03-.08
Nondiscretionary Incentive Programs .09-.12
Specific Accounting for Various Discretionary Incentives .13-.16
Free Play Offered Other Than Through Loyalty Programs .13
Cash or Cash Equivalents Offered Other Than Through Loyalty Programs .14-.15
Complimentaries Offered Other Than Through Loyalty Programs .16
Specific Accounting for Various Nondiscretionary Incentives .17-.28
Free Play Offered Through Nondiscretionary Loyalty Programs .17-.19
Cash or Cash Equivalents Offered Through Nondiscretionary Loyalty Programs .20-.21
Complimentaries Offered Through Nondiscretionary Loyalty Programs .22-.26
Nondiscretionary Loyalty Programs in Which Customers Have the Option of Choosing Multiple Types of Incentives .27
Incentive Programs That Provide Customers With Designated Status Without Entitling Customers to Any Economic
Benefits .28
Financial Statement Disclosures .29
7 Gaming License, Project Development, and Preopening and Start-Up Costs .01-.15
Background .01-.02
Summary of Selected Accounting Literature .03
Costs to Obtain a Gaming License .04-.11
Project Development Costs .12-.13
Preopening and Start-Up Costs .14-.15
8 Managing Properties for Third Parties .01-.21
Background .01-.04
Summary of Selected Accounting Literature .05-.06
Accounting by the Gaming Entity Managing the Third Party Owned Property .07-.15
Gaming Entity’s Costs Prior to Obtaining the Management Agreement .07-.11
Gaming Entity’s Costs Related to an Existing Management Agreement .12-.14
Financial Statement Classification of Amounts Paid on Behalf of the Managed Property .15
Accounting by the Managed Property .16-.19
Disclosures .20-.21
Section Paragraph
9 Guarantees .01-.29
Introduction .01
Summary of Selected Accounting Literature .02-.27
Initial Recognition and Measurement of the Guarantee .04-.13
Income Statement Effect at Initial Recognition .14
Classification of the Contract or Customer Acquisition Cost .15
Subsequent Measurement of the Liability .16-.22
Subsequent Measurement of the Asset .23-.27
Financial Statement Disclosures .28-.29
Applicability of FASB ASC 810, Consolidation .29
10 Long-Lived Assets .01-.21
Introduction .01
Summary of Selected Accounting Literature .02-.20
Long-Lived Assets to Be Held and Used .03
Triggering Events .04-.06
Grouping Long-Lived Assets to Be Held and Used and Related Issues .07-.12
Estimates of Future Cash Flows Used to Test a Long-Lived Asset for Recoverability .13-.20
Asset Retirement Obligations .21
11 Other Accounting Topics .01-.28
Intangible Assets Acquired in a Business Combination .01-.04
Jackpot Insurance .05-.13
Background .05-.07
Characteristics of Jackpot Insurance Policies .08-.10
Accounting for Jackpot Insurance .11-.13
Gaming Chips and Tokens Liabilities .14-.18
Racetrack Fees .19-.23
Background .19-.21
Accounting for Racetrack Fees .22-.23
Segment Reporting .24-.26
Uniforms and Other Long-Lived Assets .27
Deferred Income Taxes for Casinos .28
12 Governmental Gaming Entities .01-.20
Background .01
Summary of Selected Accounting Literature .02-.03
Basic Financial Statements and Required Supplementary Information .04-.10
Resource Flows Between Governmental Gaming Entities and Sponsoring Governments .11-.13
Section Paragraph
12 Governmental Gaming Entities—continued Allocation of Assets and Liabilities Within the Financial Reporting Entity .14
Impairment of Capital Assets .15-.20
Segment Reporting .20
13 General Auditing Considerations .01-.186
Introduction .01-.04
Terms of Engagement .05-.10
Opening Balances—Initial Audit Engagements, Including Reaudit Engagements .11
An Audit of Financial Statements .12-.24
Planning the Audit .14-.16
Audit Risk .17-.22
Use of Assertions in Obtaining Audit Evidence in the Assessment of Risks of Material Misstatement .23-.24
Materiality .25-.31
Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement .32-.40
Discussion Among the Audit Team .39
Industry Risk Factors .40
Related Parties .41-.44
Responsibilities of the Auditor .43-.44
Risk Assessment Procedures .45-.47
Designing and Performing Further Audit Procedures .48-.54
Identification of Significant Risks .52
Analytical Procedures Used in Risk Assessment .53-.54
Understanding of Internal Control .55-.64
IT Considerations .65-.72
Consideration of Fraud in a Financial Statement Audit .73-.111
Introduction .73-.75
Professional Skepticism .76-.77
Discussion Among the Engagement Team .78-.81
Incentives or Pressures .82-.84
Opportunities .85-.86
Attitudes and Rationalizations .87
Misappropriation of Assets .88-.91
Risk Assessment Procedures and Related Activities .92-.95
Identification and Assessment of the Risks of Material Misstatement Due to Fraud .96-.99
Responses to the Assessed Risks of Material Misstatement Due to Fraud .100-.102
Evaluation of Audit Evidence .103-.107
Auditor Unable to Continue the Engagement .108
Section Paragraph
13 General Auditing Considerations—continued Communications to Management and With Those Charged With Governance .109-.110
Documentation .111
Consideration of Laws and Regulations .112-.117
Responsibility for Compliance With Laws and Regulations .113-.117
Audit Performance and Execution .118-.126
Designing and Performing Further Audit Procedures .118-.126
Timing of Audit Procedures .127-.130
Analytical Procedures Used in Audit Performance .131-.135
Audit Documentation .136-.143
Timely Preparation of Audit Documentation .139-.142
Assembly and Retention of the Final Audit File .143
Auditor’s Consideration of Using the Work of Internal Auditors .144
Using the Work of Other Specialists .145-.149
Evaluation of Misstatements Identified During the Audit .150-.151
Written Representations .152-.160
Written Representations as Audit Evidence .153-.160
Communication With Those Charged With Governance .161-.166
Going Concern Considerations .167-.175
Audit Procedures .169-.170
Consideration of Conditions and Events .171
Consideration of Financial Statement Effects .172
Consideration of the Effects on the Auditor’s Report .173
Communicate With Those Charged With Governance .174
Documentation .175
Group Audit Engagements .176-.181
Definition of a Component .179-.180
Group Audit Technical Practice Aid .181
Other Information, Supplementary Information, and Required Supplementary Information .182-.186
14 Special Auditing Considerations .01-.52
Cash Balances and Revenue Cutoff .02-.06
Components of Cage Accountability .03-.04
Cage Procedures .05-.06
Tests of Accountability .07-.13
Cutoff Procedures .14-.22
Table Games .16-.17
Slot Machines .18-.19
Other Games .20-.22
Online Gaming .23
Section Paragraph
14 Special Auditing Considerations—continued Drop and Count Procedures .24-.27
Receivables .28-.31
Background .28-.31
External Confirmation of Gaming Receivables .32-.45
Mail Circularization .42
Oral Responses .43-.44
Alternative Procedures When No Reply Is Received .45
Branch Offices .46
Allowance for Doubtful Accounts .47-.52
Special Considerations for New Gaming Operations .49
Unannounced Audit Procedures .50-.52
15 Internal Control .01-.53
Introduction .01-.08
Gaming Internal Control Considerations .09
Granting and Control of Credit .10-.15
Approval of Credit Lines and Maintenance of Credit Files .10
Issuance of Credit .11-.12
Recording of Credit Transactions .13
Custody of Markers .14-.15
Bingo .16-.19
Cage .20-.22
Card Games .23-.25
Gaming Tournaments .26
Information Technology .27-.30
Keno .31-.34
Lotteries .35-.37
Promotions and Incentive Programs .38
Race and Sports Book (for Computerized Systems) .39-.43
Slot Machines .44-.49
Table Games .50-.53
16 Analytical Procedures .01-.12
Introduction .01-.04
Types of Analytical Procedures .05-.12
Table Games and Poker .10-.12
Appendix
A The New Revenue Recognition Standard: FASB ASU No2014-09
B Mapping and Summarization of Changes—Clarified Auditing Standards
C Illustrative Financial Statements
D Illustrative Guidance When Accounting for Guarantees
E The New Jersey Casino Reinvestment Development Authority
F Currency Transaction Reporting in the Gaming Industry
G Rules of the Games
H Schedule of Changes Made to the Text From the Previous Edition
Glossary
Index of Pronouncements and Other Technical Guidance
Subject Index
