This course provides an overview of the first step in the revenue recognition process - the identification of a contract with a customer. This includes a discussion of key definitions and considerations along with the detailed accounting guidance from ASC Topic 606. This course incorporates excerpts from the FASB's basis for conclusions of the new revenue recognition standard as well as key excerpts from Big 4 revenue recognition guides in order to develop a comprehensive understanding of this step in the process.
Learning Objectives
Upon completion of this course, you will be able to:
• List the five steps involved in the new revenue recognition model
• Recognize the overall considerations involved in identifying whether a contract exists
• Identify how collectibility is assessed to determine whether a contract exists
Major Topics
Changes Needed to Revenue Recognition
Approval of the Contract / Commitment to Performance
Identification of Each Party's Rights
Identification of Payment Terms
Commercial Substance
Probability of Collection of Substantially all of the Contract Consideration
