ASC 606 Identifying the Contract - Part 1

Learning Objectives

• To compare/contrast elements of the new standard with the previous standard.
• To explore various criteria in the step “Identify the Contract” including - Approval/commitment of parties, Identification of rights of parties, Payment terms can be identified, The contract has commercial substance, and Collection is probable.
• To identify when a contract modification requires a new contract or can be combined with the original contract.
• To explain the accounting for non-contract modifications.
• To discuss the accounting for contract modifications.

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 standard for contract revenue recognition will follow five steps:

• 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 Accounting webinar will delve into the many concepts involved in Step One:  Identify the contract.

This CPE course by Lynn Fountain utilizes many examples from numerous industries to enhance the learning of the various concepts.

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

Overview

• What is Revenue

  5 mins
• Identify the contract

  20 mins
• Step one: Contract Criteria

  28 mins
• Approval and Commitment

  32 mins
• Rights of each party

  41 mins
• Identifiable terms

  48 mins
• Collection probability

  55 mins