ABC Company (NAME OF COMPANY IN CASE)

Date: September 24, 2012 (DATE ASSIGNMENT DUE)

Prepared by: Really Smart Senior (YOUR NAME)

Reviewed by: Professor Robert Elya

ISSUE: Accounting for ABC’s sale-sublease-leaseback of solar equipment with customers and third party investors. (THIS TOPIC/ISSUE LINE SHOULD SUCCINCTLY DESCRIBE THE OVERALL ACCOUNTING ISSUE BEING ADDRESSED IN THE MEMO)

BRIEF BACKGROUND OF COMPANY (THIS SECTION IS DESIGNED TO PUT THE ISSUE IN CONTEXT) THIS SECTION SHOULD BRIEFLY DESCRIBE THE IMPORTANT INFORMATION ABOUT THE COMPANY THAT A READER OF MEMO WOULD FIND HELPFUL IN EVALUATING THE ISSUE, INCLUDING NATURE OF ITS BUSINESS, RELATIVE SIZE (TO PROVIDE DEGREE OF MATERIALITY OF ISSUE TO THE COMPANY’S OVERALL FINANCIAL STATEMENTS),PUBLIC/PRIVATE (TO DETERMINE SEC CONSIDERATIONS), AND AN INTRODUCTION TO THE OVERALL QUESTION BEING ADDRESSED

ABC Company is a publicly held alternative energy firm that develops and leases solar panel technology to residential, government and commercial markets. As of December 31st, 2011, ABC Company recognized $X billion in revenue for the sale, lease and installation of photovoltaic solar systems. Customers have the choice of either purchasing or leasing ABC’s solar panels. ABC Company is currently involved in a sale and leasing arrangement involving residents and third party investors.

KEY CONSIDERATIONS INVOLVED IN THE ACCOUNTING QUESTIONS (IN THIS SECTION YOU WILL BREAKDOWN THE OVERALL ACCOUNTING QUESTION INTO ITS COMPONENT PARTS THAT MUST BE ANSWERED TO ARRIVE AT YOUR OVERALL CONCLUSION)

1. Is the Host Customer Agreement, between ABC and the residents, an operating or capital lease? 2. Are the solar systems considered integral equipment and therefore subject to the additional sale-leaseback requirements associated with real estate? 3. What is the classification of the leaseback from