Ridgeway Financial Services (RFS) helps fintech startups and scale-ups prepare technical accounting memos to support audit readiness, investor transparency, and regulatory compliance. These memos help management document key judgments, structure financial statements properly, and ensure consistency across reporting periods. This list summarizes the common scenarios where RFS prepares memos for clients for clarity. Contact us for assistance.

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Revenue Recognition & Fee Structures (ASC 606, ASC 310)

1. Revenue Categorization (Interest vs Non-Interest)
   Why it matters: Determines which revenues fall under ASC 606 versus ASC 310.
   Memo includes: Classification of interest income, fees, float, interchange, and subscription services.
2. Interchange Fee Recognition
   Why it matters: Must determine timing and gross vs net presentation.
   Memo includes: Transaction-level revenue recognition, platform vs issuer roles.
3. Referral or Marketplace Fees (Principal vs Agent)
   Why it matters: Impacts whether revenue is shown gross or net.
   Memo includes: Role of fintech vs bank or third-party provider, analysis of control.
4. Subscription or Platform Access Fees
   Why it matters: Determines whether revenue is recognized over time.
   Memo includes: Performance obligations, contract terms, refund rights.
5. Nonrefundable Upfront Fees and Breakage
   Why it matters: Fintechs often charge onboarding or card issuance fees.
   Memo includes: Revenue recognition timing, breakage estimate, refund analysis.
6. Cash-Back and Loyalty Incentives
   Why it matters: May be treated as a reduction of revenue or marketing expense.
   Memo includes: Determination of whether incentives are linked to revenue or separate arrangements.
7. Costs to Obtain a Contract
   Why it matters: Commissions or partner acquisition costs may be capitalized.
   Memo includes: Amortization method and impairment considerations.

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Lending & Credit Losses (ASC 310, ASC 326)

8. Loan Accounting & Interest Recognition
   Why it matters: Determines income recognition and application of fees.
   Memo includes: Effective interest method, origination fees, deferred costs.
9. CECL – Credit Loss Reserves
   Why it matters: Required for loans and off-balance-sheet exposures.
   Memo includes: Loss pool segmentation, historical data, forecasts, qualitative overlays.
10. Loan Modifications or TDRs
    Why it matters: May impact recognition and disclosures.
    Memo includes: Restructuring terms, comparison to original yield.
11. Chargeback and Reserve Liabilities
    Why it matters: For payments companies subject to fraud or return risk.
    Memo includes: Historic loss data, reserve methodology.
12. Servicing Assets and Securitizations (ASC 860)
    Why it matters: Affects gain/loss on loan sales.
    Memo includes: Derecognition criteria, servicing rights, VIE considerations.
13. Loan Purchase Agreements
    Why it matters: Purchased loans must be evaluated for PCD status and discount accretion.
    Memo includes: Expected credit loss calculation and yield analysis.

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Financial Instruments & Equity (ASC 480, ASC 815, ASC 718)

14. SAFE and Convertible Instruments
    Why it matters: Typically liability-classified and measured at fair value.
    Memo includes: Conversion features, discount, valuation cap, equity linkage.
15. Warrants or Derivative Liabilities
    Why it matters: May be embedded or freestanding and require bifurcation.
    Memo includes: Fixed-for-fixed analysis, remeasurement through P&L.
16. Preferred Stock Classification
    Why it matters: Determines liability vs equity treatment.
    Memo includes: Redemption rights, liquidation preferences.
17. Fair Value Measurement (ASC 820)
    Why it matters: For remeasurement of liabilities, investments, or CECL inputs.
    Memo includes: Valuation methods, Level 3 inputs, calibration to market data.
18. Stock-Based Compensation
    Why it matters: Common in early-stage fintechs.
    Memo includes: Option pricing model, expense accrual, 409A tie-in.

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Partner Structures & Consolidation (ASC 810)

19. Partner Bank Programs
    Why it matters: Bank owns the balances but fintech may operate the program.
    Memo includes: Who is the customer, control assessment, agent vs principal.
20. Consolidation of Sponsored SPVs
    Why it matters: Fintechs often create VIEs for securitization or program structure.
    Memo includes: VIE status, primary beneficiary test.
21. Related-Party Program Affiliations
    Why it matters: May require disclosure or consolidation.
    Memo includes: Ownership/control, risk exposure.

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Compliance & Risk Disclosures

22. Regulatory Capital & Reserve Reporting
    Why it matters: Required for lending and payment processors.
    Memo includes: Calculation methods, cash segregation.
23. PCI DSS and Security Compliance Costs
    Why it matters: May require expense accrual or capitalization.
    Memo includes: Timing of certification, cost allocation.
24. AML/KYC and BSA Program Disclosures
    Why it matters: Noncompliance could lead to material risks.
    Memo includes: Risk disclosure and internal control assessment.
25. Crypto Custody or Payment Flows
    Why it matters: Increasing number of fintechs use or hold crypto.
    Memo includes: Asset classification (intangible or financial), safeguarding obligations.

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Tax, Presentation, and Other Areas

26. Valuation Allowance on DTAs (ASC 740)
    Why it matters: Fintechs with operating losses may not recognize all tax benefits.
    Memo includes: Future profit projections, expiration schedules.
27. Going Concern Assessment (ASC 205-40)
    Why it matters: Fintech burn rates may impact liquidity runway.
    Memo includes: Funding plan, cost reduction strategy.
28. Non-GAAP Measure Policy
    Why it matters: Used in pitch decks, term sheets, and fundraising.
    Memo includes: Reconciliation, rationale, consistency.
29. Customer Funds and Custodial Risk
    Why it matters: Held funds may require separate classification or disclosures.
    Memo includes: Whether assets and liabilities are recorded gross or net.
30. SLAs and Transaction Guarantees
    Why it matters: Common in BaaS and API products with contractual penalties.
    Memo includes: Variable consideration estimates, breakage, or refund reserves.

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This is not an exhaustive list. If you are facing a unique or complex accounting matter not shown here, reach out to us. Ridgeway Financial Services is happy to help. Contact us.