D105 completes WGU's intermediate accounting sequence with some of the most technical topics in financial reporting: revenue, investments, income taxes, leases and pensions.
WGU's program guide describes comprehensive coverage of investments, revenue recognition, accounting for income taxes, pension plans and leases. It also covers accounting changes and error analysis, full disclosure requirements and interpretation of the statement of cash flows. Intermediate Accounting I and II are the prerequisites.
Each topic has its own standard and vocabulary. Treat them as separate units and practice each until the entries make sense.
Course at a Glance
| Item | Details |
|---|---|
| University | Western Governors University (WGU) |
| Code | D105 |
| Level | Undergraduate, B.S. Accounting |
| Competency units | 3 |
| Prerequisites | Intermediate Accounting I and II |
| Typical work | Advanced GAAP problems (check your course page for the assessment format) |
What D105 Covers
| Competency (summarized) | Key topics |
|---|---|
| Account for revenue | Five-step model, performance obligations |
| Account for investments | Debt and equity securities, equity method |
| Account for income taxes | Deferred tax assets and liabilities |
| Analyze leases | Lessee finance and operating leases |
| Analyze accounting changes and errors | Changes in principle and estimate, restatements |
| Describe pension accounting | Defined benefit obligations and plan assets |
Key Concepts Explained
The Five-Step Revenue Model
Under ASC 606: identify the contract, identify the performance obligations, determine the transaction price, allocate the price to the obligations, and recognize revenue when (or as) each obligation is satisfied.
Example: A firm sells a machine with one year of maintenance for $11,000. Standalone prices are $10,000 for the machine and $2,000 for maintenance. Allocation: machine $11,000 x 10/12 = $9,167, maintenance $1,833. Machine revenue is recognized on delivery; maintenance revenue over the year.
Deferred Taxes
Temporary differences between book and tax amounts create deferred tax liabilities or assets.
Example: Book depreciation is $20,000 but tax depreciation is $35,000. Taxable income is $15,000 lower now and will be higher later. At a 21% rate, a deferred tax liability of $3,150 is recorded.
Leases
Under ASC 842, lessees recognize a right-of-use asset and a lease liability for most leases longer than 12 months. Finance leases recognize interest and amortisation separately; operating leases recognize a single straight-line lease cost.
Investments
Debt securities are classified as held-to-maturity, trading or available-for-sale. Equity investments with significant influence, often around 20% to 50% ownership, generally use the equity method.
Accounting Changes, Errors and Disclosure
The course also covers how to report changes and fix mistakes. Each type has a different treatment:
| Type | Treatment |
|---|---|
| Change in accounting principle | Usually retrospective, restating prior periods |
| Change in accounting estimate | Prospective: current and future periods |
| Correction of an error | Restate prior periods; adjust opening retained earnings |
Full disclosure means notes explain policies, judgments and events that users need to understand the statements. Questions often ask whether an item requires recognition, disclosure or neither.
Typical Tasks and How to Approach Them
| Task type | What it tests | How to approach it |
|---|---|---|
| Revenue problems | Five-step model | Work through the five steps in order, every time |
| Deferred tax problems | Temporary versus permanent differences | Classify each difference before calculating |
| Lease problems | Classification and measurement | Calculate present value of payments, then build a schedule |
| Changes and errors | Correct reporting approach | Identify the type first, then apply its treatment |
Pension Basics
The pension competency asks you to describe the accounting for defined benefit plans. In a defined contribution plan, the employer's expense is simply the contribution. A defined benefit plan promises a future benefit, so the employer bears the investment and actuarial risk.
The key figures are the projected benefit obligation (the present value of benefits earned so far) and the fair value of plan assets. If the obligation exceeds the assets, the plan is underfunded and a net liability is reported.
Pension expense typically combines service cost, interest cost on the obligation, the expected return on plan assets and amortisation of certain deferred items. Learning what each component means makes the journal entries far less intimidating.
Example: The projected benefit obligation is $2.4 million and plan assets are $2.1 million. The balance sheet reports a net pension liability of $300,000, and notes disclose the main assumptions such as the discount rate.
Where Students Get Stuck
- Performance obligations. Ask whether each promise is distinct before allocating price.
- Permanent differences. These never reverse and create no deferred tax.
- Pension terms. Separate the projected benefit obligation from plan assets before netting.
- Estimate versus principle. A change in depreciation method is treated as a change in estimate under U.S. GAAP.
Study Tips for D105
- Study one topic at a time; do not mix leases and pensions in the same session.
- Build a lease schedule and a bond schedule side by side to see the shared logic.
- Make a summary card for each standard.
- Practice full revenue problems with multiple obligations.
How We Help with D105
Send your problems, templates and rubric. An accounting tutor can prepare worked solutions, explain standards or review your work. For broader support, see our accounting assignment help guide.
GradeEssays is independent of Western Governors University. Our solutions are study aids; complete your own assessments. We never sit exams for students. Every order is written from scratch, includes free revisions within the scope of your original request and is refunded in full if it is late.
Finish Intermediate Accounting Strong
Share your practice problems and rubric. We prepare worked solutions with GAAP reasoning.
Start My D105 HelpFree revisions · Full refund if late · Written from scratch for your order
Frequently Asked Questions
Investments, revenue recognition, income taxes, pensions, leases, accounting changes and errors, full disclosure and cash flow statement interpretation.
WGU lists Intermediate Accounting I and II.
Yes. WGU describes it as completing the intermediate accounting journey.
The U.S. GAAP standard for revenue from contracts with customers, built on a five-step model.
WGU uses objective assessments, performance assessments or both. Check your course page for the current format.
Yes, with worked problems and explanations. We do not take assessments for students.