ASC 606 Identifying Performance Obligations - Part 1

Learning Objectives

• To explore requirements behind step two of the revenue recognition standard “performance obligations”.
• To identify the differentiation between distinct and non-distinct goods/ services.
• To examine examples of both distinct and non-distinct goods/services.
• To analyze how to measure progress over time.
• To discuss how to recognize revenue over time.
• To explore the processes used for intellectual property.
• To test your knowledge examples.

Course Description

The new standard applies to all companies. We have covered the first step “Identify the Contract” within two previous segments. The second step is to identify the performance obligations. This CPE webinar will focus on “Understanding the new revenue recognition rules” and its five-step model outlined in the standard that organizations must utilize when recognizing revenue.

This CPE course by Lynn Fountain delves into step two of the revenue recognition process relating to performance obligations. Identifying performance obligations requires having a detailed understanding of the contract, deliverables, promises, and contract timing. It involves being able to distinguish between distinct and non-distinct goods and services to identify whether one or more performance obligations exist. This task involves significant judgment and requires specific considerations to be applied to properly identify the performance obligations.  

Other aspects relating to performance obligations that will be discussed within this segment are the concepts of measuring progress over a while and identifying how to recognize revenue over some time.  This segment also evaluates how to recognize revenue related to intellectual property.

This segment is the first of two segments that evaluate performance obligations. Part two will examine elements surrounding factors that impact performance obligations and examine how to handle up-front fees or stand-alone offers.

This course covers the following Major Topics: 

• Performance Obligation & Examples
• Distinct goods/services & examples
• Alternative examples
• District and Non-distinct examples
• Determination of District vs. Non-distinct
• Revenue Generation over some time
• Measuring progress toward completion
• Activities that do not transfer goods/services
• Intellectual property revenue

This CPE Accounting webinar utilizes many examples from numerous industries to enhance the learning of the various concepts.

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

Overview

• Performance obligation

  3 mins
• Distinct Goods/Services

  12 mins
• Non-Distinct

  31 mins
• Determination of Distinct vs. Non-distinct

  42 mins
• Activities that do not transfer Goods/Services

  53 mins