Revenue Recognition Topic 606 - Identify the Contract Part 1

Overview

On May 28, 2014, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) issued converged guidance on recognizing revenue in contracts with customers (ASC 606). 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.  

This is one in a series of courses that outline the updated revenue recognition standard.

Objectives

• Recognize how elements of the new revenue recognition standard differ from the previous standard
• 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
• Collection is probable
• Identify when a contract modification requires a new contract or can be combined with the original contract
• Explore accounting for non-contract modifications
• Explore accounting for contract modifications

Highlights

• Revenue Recognition