Aurgus
Checklist · ASC 705-20

The rebate close checklist

What your auditors will ask — and how to answer them

32 audit tests across 6 sections: ASC 705-20 accrual documentation, supporting schedules, tiered threshold tracking, variance analysis, supplier agreement mapping, and month-end sign-off. Written for the controller or CAS practitioner running the close — not for a preparatory memo.

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32 audit tests · 6 sections

What the checklist covers

Section 1
ASC 705-20 accrual documentation
6 audit tests: direction rule application, rate-to-agreement mapping, period allocation method, COGS entry traceability, advertising exception, prior-period true-up explanation
Section 2
Supporting schedules
6 audit tests: vendor master completeness, YTD purchase detail, accrual roll-forward, rate cross-reference, estimate basis ownership, schedule currency
Section 3
Tiered threshold tracking
5 audit tests: tier structure replication, retroactive vs. incremental logic, mid-year program changes, prior-year attainment comparison, sensitivity analysis for material programs
Section 4
Variance analysis
5 audit tests: accrual-to-settlement variance, period-over-period rate change, true-up entry drivers, stale accrual documentation, vendor dispute segregation
Section 5
Supplier agreement mapping
6 audit tests: rebate type classification, measurement period handling, settlement timing distinction, assignment provisions, amendment documentation, expiring agreement treatment
Section 6
Month-end sign-off
5 audit tests: preparer accountability, independent reviewer, escalation for material accruals, CPA/external review documentation, ERP journal entry approval
Audience

Who uses this checklist

Controllers at wholesale distributors

Running the rebate close for a distribution business with 20+ vendor programs. Use this the week before auditors arrive to confirm your accrual documentation is complete before they start asking.

CPA / CAS practitioners

Running the rebate close for distribution or manufacturing clients. Use this to structure client documentation requirements before fieldwork and to identify gaps before your engagement partner reviews.

Before the checklist: assess your ERP rebate gap → to know which sections require the most preparation.

For the broader measurement framework, see Distributor Rebate Recovery Benchmarks: What Controllers Need to Know. What the failure modes look like in practice →

About

About Aurgus

Aurgus is a close-operations product that runs the rebate accrual computation, governs estimates, and builds audit-ready lineage from source PO to COGS entry. $600/month per entity. Book a working session →

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