Accounting memos: format, example, and template

Most teams write memos from a blank page or last year’s file. Below is the standard format, a worked example, a template you can copy, and the checklist reviewers use, from a team of CPAs.

When do you need an accounting memo?

Whenever a conclusion depends on judgment and someone will later ask how you reached it. The usual triggers:

What are the types of accounting memos?

• Technical accounting memo (issue memo, position paper): applies the guidance to one transaction or judgment and reaches a conclusion.
• Accounting policy memo: documents a policy or election the company will apply consistently, such as a capitalization threshold or a practical expedient.
• Research memo: summarizes what the guidance says on a question before a decision is made, often for a new standard or a planned transaction.
• Memo to file: a short record of a conclusion or a fact that needs no full analysis but should be documented.

What should an accounting memo include?

The accounting memo format most reviewers expect has nine parts, in this order:

1. 1

   Header. To, from, date, and subject, plus the period or transaction the memo covers.

2. 2

   Purpose. One or two sentences stating exactly what the memo decides. "How many performance obligations are in this contract, and how is the price allocated?" is a purpose. "ASC 606" is a topic.

3. 3

   Background and facts. The facts the conclusion depends on, each traceable to a source: the contract section, the board minutes, the price list.

4. 4

   Relevant guidance. The Codification paragraphs that apply, cited by number (for example, ASC 606-10-25-19), and any interpretive guidance used.

5. 5

   Analysis. The guidance applied to the facts, one judgment at a time, including the alternatives considered and why each was accepted or rejected.

6. 6

   Conclusion. The answer to the question in the purpose section, stated plainly.

7. 7

   Financial statement impact. The amounts, the journal entries, and the periods affected.

8. 8

   Disclosure considerations. What the conclusion requires in the footnotes.

9. 9

   Review and approval. Who prepared it, who reviewed it, the dates, and any open items.

Accounting memo example

An abbreviated technical accounting memo on a common revenue question: is a SaaS implementation fee a separate performance obligation? For the full five-step structure, see what an ASC 606 memo includes.

Accounting memo template

Copy this into your own document. The bracketed text tells you what goes in each section.

ACCOUNTING MEMO

To:    [Reviewer name and title]
From:  [Preparer name and title]
Date:  [Date]
Re:    [Transaction or issue], [period]

1. PURPOSE
[The question this memo answers, in one or two sentences.]

2. BACKGROUND AND FACTS
[The relevant facts, each with its source: contract section,
board minutes, price list.]

3. RELEVANT GUIDANCE
[Codification paragraphs, cited by number. Interpretive
guidance used, if any.]

4. ANALYSIS
[Apply the guidance to the facts. For each judgment, list the
alternatives considered and why each was accepted or rejected.]

5. CONCLUSION
[The answer to the question in section 1.]

6. FINANCIAL STATEMENT IMPACT
[Amounts, journal entries, and periods affected.]

7. DISCLOSURE CONSIDERATIONS
[Footnote disclosures the conclusion requires.]

8. REVIEW AND APPROVAL
Prepared by:  [Name, date]
Reviewed by:  [Name, date]
Open items:   [None, or list]

Would a first draft from your own contract help more? See Gaapio draft one.

How do you write an accounting memo?

1. 1

   Write the question first. If you can't state the question in a sentence, the memo will wander. Everything after it should help answer that sentence.

2. 2

   Collect the facts from source documents. Pull the contract, the price list, and the approvals before you start writing, and note where each fact came from.

3. 3

   Start from the Codification. Find the governing Codification topic and paragraphs (and SEC rules, for SEC registrants) before reading interpretive guidance, so every conclusion traces back to authoritative GAAP.

4. 4

   Work the alternatives. A reviewer's first question is usually "what else did you consider?" Answer it in the memo, including the views you rejected.

5. 5

   Quantify it. Connect the conclusion to amounts, journal entries, and the disclosure, so the memo ties to the financial statements.

6. 6

   Get it reviewed. A second accountant reads it cold. If they can't follow the path from guidance to conclusion, neither can the auditor.

What do reviewers and auditors look for in a memo?

Can AI write a technical accounting memo?

It can draft one. Whether the draft is worth reviewing depends on what the AI is grounded in. Teams that have tried generic personal free AI tools for memos describe the same problem:

There’s a quieter question under this one: is it cheating to have software draft the memo? The value of a memo is the judgment and the sign-off, and both stay with the accountant. A drafting tool is the same kind of starting point as a team template or last year’s memo. The reviewer still checks every citation, and the company’s accountants still own the conclusion.

How Gaapio drafts accounting memos

Gaapio is an AI-powered technical accounting platform built by CPAs. It drafts technical accounting memos from your contracts and facts, for ASC 606 revenue recognition, ASC 842 lease accounting, ASC 805 purchase accounting, and other topics across the Codification.

• Grounded in the licensed FASB Codification, Big 4 guidance, and SEC filings and comment letters.
• Asks follow-up questions about your facts before it drafts.
• Shows the alternatives where the analysis forks, so the reviewer sees the close calls.
• Conclusions come with clickable citations, and it tells you when it does not know.
• Drafts in your team’s memo template, with reviewer comments, approvals, and version history.
• Gaapio has completed a SOC 2 Type 2 examination, and customer data is never used to train third-party AI models. More on security and data handling.

The demo uses a different contract from the example above, so its conclusion differs.

A CPA firm using Gaapio checked a draft against its own work:

Gaapio also drafts the footnote language that follows from the conclusion; see footnote disclosures and contract analysis.

Frequently asked questions

Note: the example is illustrative, with simplified facts, and is general information rather than accounting advice for a specific situation. Customer quotes come from Gaapio’s conversations with accounting teams and are cited by segment and month.

Written and maintained by the Gaapio team of CPAs. Last reviewed October 2026.