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 identifying valid contracts, determining performance obligations, assessing variable consideration, and distinguishing between recognizing revenue over time versus at a point in time. The course also covers principal versus agent considerations, accounting for contract modifications, licensing arrangements, and disclosure requirements.
Learning Objectives
- Identify the criteria for contract validity under ASC 606
- Recognize complexities in multiple contracts with the same customer
- Determine the effects of contract modifications on revenue recognition
- Differentiate between contract cancellations and terminations
- Recognize the criteria for determining if goods or services are separately identifiable
- Determine the impact of customization on performance obligations in contracts
- Identify different types of variable payments in contracts, including discounts, rebates, and bonuses
Major Topics
- Types of performance obligations
- Bundled offerings
- Customizations
- Modifications to product specifications
- Requests for additional services
- Alterations in delivery timelines
- Long-term contracts
- Enforceability and payment terms
