ASC 606 – All you need to know about the new Revenue Recognition rules for long-term construction and similar contracts

Learning Objectives

• To recognize the strengths of the new revenue requirements.
• To describe the more robust framework for addressing revenue issues.
• To discuss the 5-step approach to revenue recognition.
• To explain how to recognize and account for performance obligations and its related revenue.
• To review how to apply FASB ASC 606 to construction and similar contracts.

Course Description

How we account for the revenue related to construction contracts (and similar contracts) is changing in a fundamental way.

FASB recently introduced ASC 606 with new rules for revenue recognition (Revenue from Contracts with Customers).

“Earning” revenue will no longer be based strictly on invoices to customers. Instead, it will be proportional to the level of extinguishment of contract performance obligations.

We will walk you through the step-by-step process of revenue recognition as prescribed by the new standard. Disclosure and documentation will be discussed.

Because ASC 606 recommends percentage-of-completion for long-term construction contracts (and similar contracts). we will provide you with a detailed example and explain to you all the figures, calculations, and concepts.

Major topics covered in this Accounting CPE webinar:

• Introduce the new core principles of revenue recognition.
• Know how to identify and define a construction or similar contract.
• Understand the concept of performance obligations.
• Determining and allocating a transaction price.
• 5-step process for recognizing construction revenue.
• Disclosure requirements.

Overview

• Who is affected by the amendments in ASC 606?

  9 mins
• Standalone selling price

  16 mins
• Disclosure requirements

  31 mins
• Criteria for identifying the contract

  40 mins
• Accounting for a contract modification

  55 mins
• Determining the transaction price

  73 mins
• Disaggregation of revenue

  84 mins