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
Upon successful completion of this course, participants will be able to:
Identify different types of variable payments in contracts, including discounts, rebates, and bonuses
Recognize the importance of accurate estimation of variable payments for revenue recognition
Determine appropriate methods for estimating uncertain payment amounts
Distinguish between contracts with and without significant financing components
Recognize factors that impact the time value of money in long-term payment contracts
Identify when a contract modification is treated as a new contract or continuation of an existing one
Recognize when additional goods or services in a modification are distinct
Determine if the price adjustment reflects the standalone selling prices of the new goods or services
Differentiate between contract modificationsas separate contracts or part of the existing agreement
Select the appropriate revenue recognition method for a contract modification
Major Topics
Methods to Estimate Variable Consideration
Constraining Estimates
Significant Financing Components
Accounting for Contract Modifications
Modification Approval Assessment
Factors Supporting Contract Modification Approval
Modification Accounted for as Separate Contract
Modification Not Accounted for as a Separate Contract
