Revenue Recognition (ASC Topic 606): Case Scenarios for Allocating the Transaction Price and Recognize the Revenue

Learning Objectives

• To identify important components involved in Step Four – Allocate the transaction price to PO.
• To explore the various estimation approaches for determining SSP outlined by the standard.
• To analyze how to allocate discounts between performance obligations.
• To discuss concepts of variable consideration.
• To evaluate elements of Step Five – recognize revenue.
• To know how to recognize revenue over time vs. at a period.
• To examine methods for measuring progress towards completion of a project including input method and output method.
• To explain the concepts of enforceable right of payment.
• To discuss components necessary when a right of return exists.

Course Description

This CPE course is dedicated to the evaluation of case scenarios related to Step Four and Five of the revenue recognition model. Step Four entails “Allocating the Transaction Price to Performance Obligations” and Step Five entails “Recognizing Revenue”. 

Previous CPE courses have outlined each of the individual five steps of the model and provided case examples. We have also developed two broad case study courses that cover scenario examples for each of the five steps. To focus directly on aspects within each step, individual courses have been created with multiple case scenarios that apply to the individual given steps.

This CPE Accounting webinar includes the many considerations companies must take into account when determining how to allocate the transaction price to performance obligations and then move to the final step of recognizing revenue.

We review the concepts of allocation methods and methods to estimate stand-alone selling prices. We also discuss aspects involved in recognizing revenue including accounting for discounts, variable compensation, and how to recognize revenue over time versus at a point in time.

After taking this CPE course by Lynn Fountain you should be able to effectively apply your understanding of Step Four and Five of the revenue recognition model to specific scenarios within your business. Each learning objective listed utilizes multiple examples from various industries to help interpret and practice the concept. 

Key topics covered in this course:

• Allocate
• Estimation Approaches
• Adjusted Market Assessment
• Expected Cost Plus Margin
• Residual Approach
• How to allocate
• Variable consideration
• Recognize Revenue overtime
• Methods for Recognizing Revenue Overtime
• When output and input are inappropriate
• Enforceable Right to Payment
• Recognize Revenue at a point in time
• Rights of Return

Have a look at Revenue the Recognition Certificate Course, we have on our website authored by Lynn Fountain.

Overview

• Estimation approach's

  8 mins
• Expected cost plus margin

  29 mins
• Residual approach

  36 mins
• Variable consideration

  47 mins
• Recognize revenue overtime

  57 mins
• When output and input are inappropriate

  81 mins