Question 1

What are trade promotion accruals?

Accepted Answer

Trade promotion accruals are the estimated liability a manufacturer records for promotional spend (deductions, billbacks, slotting, co-op marketing, off-invoice discounts) that has been earned by trade partners but not yet settled. Under ASC 606, these are variable consideration and must be estimated with reasonable certainty — and the supporting lineage is increasingly what auditors ask for.

Question 2

Why are trade promotion accruals an ASC 606 risk?

Accepted Answer

Because the accrual is an estimate at the time of sale, settled months later. The gap between estimated and actual is variable consideration that has to be defensible. PCAOB-inspected firms increasingly require reproducible lineage from the original promotion terms to the qualifying sales to the eventual settlement. Reconstructed-from-spreadsheets defenses are no longer reliably accepted.

Question 3

Does Aurgus integrate with TPM (trade promotion management) systems?

Accepted Answer

TPM integration is engagement-scope custom work today — no pre-built TPM connectors ship. The universal ingestion pipeline accepts TPM exports as CSV or spreadsheet, and the architectural pattern complements TPM cleanly: TPM systems are typically strong on promotion planning and weak on accrual lineage; Aurgus is the calculation and audit-trail layer. Pre-built TPM connectors are on the roadmap pending design-partner demand.

Question 4

How does Aurgus handle the gap between estimated and actual?

Accepted Answer

Adjustment events. When actuals come in different from the original accrual estimate, Aurgus posts an Adjustment event that supersedes the original — but never overwrites it. The full history of the original estimate, why it was made, and what corrected it lives on the event log.

Field notes on the governed close