This course provides an overview of critical challenges companies encounter under ASC 606, emphasizing several key areas that can be particularly challenging for effective revenue recognition. This includes considerations relating to variable consideration and accounting for contract modifications. This course also addresses the accounting considerations related to significant financing components.
Learning Objectives
- Recognize the importance of accurate estimation of variable payments for revenue recognition
- Determine the effects of contract modifications on revenue recognition
- Determine appropriate methods for estimating uncertain payment amounts
- Distinguish between contracts with and without significant financing components
- Select the appropriate revenue recognition method for a contract modification
Major Topics
- Modifications to product specifications
- Requests for additional services
- Alterations in delivery timelines
- Constraining estimates
- Different types of variable payments in contracts, including discounts, rebates, and bonuses
