ASC 606 Application in Complex Business Situations - Part 2

Learning Objectives

• To explore step one “Identify the Contract” and identify solutions to exercises for step one.
• To review step two “Performance Obligations” and identify solutions to exercises for step two.
• To analyze step three “Determine the Transaction Price” and identify solutions to exercises for step three.
• To discuss step four “Allocate the Transaction Price” and identify solutions to exercises for step four.
• To examine step five “Recognize Revenue” and identify solutions to exercises for step five.

Course Description

On May 28, 2014, the FASB and IASB issued converged guidance on recognizing revenue in contracts with customers. The objective of the guidance is to establish principles to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue from contracts with customers. The new guidance provides several benefits to financial statement users.  

Entities applying the new Accounting Standards Codification (ASC) Topic 606: Revenue from Contracts with Customers must follow five steps to revenue recognition:

• Identify the contract with the customer
• Identify performance obligations
• Determine the transaction price
• Allocate the transaction price to performance obligations
• Recognize revenue when each performance obligation is satisfied

Although these steps may seem simplistic at the surface, within each step are multiple components and considerations users must be aware of.  

This CPE course by Lynn Fountain will briefly outline each of the five steps and then work through various exercises and scenarios covering each of the steps. This is a second practice case study CPE course for the new five-step revenue recognition model. It utilizes separate examples from numerous industries to enhance the learning of the various concepts.

We will continuously monitor the new revenue recognition standard updates, be sure you’re subscribed to receive our latest Accounting webinars. 

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

Overview

• Five step model

  6 mins
• Identify the contract

  13 mins
• Combining contracts

  27 mins
• Exercise two identify the contract collectability

  42 mins
• Step two performance obligations

  62 mins
• Step five: Recognize revenue

  122 mins