RevenueHub | Revenue Recognition: Simplified

The RevenueHub team provides plain-English articles outlining technical insights and other valuable information for applying the ASC 606 revenue recognition standard to your business.

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COVID-19 Impact on Revenue Recognition

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COVID-19 impacts much of the revenue model. Learn which parts of your revenue policy and procedures may need to be adapted in response to the recent pandemic.

Comprehensive Biotech Contract Evaluation: Case Study

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Walk through the five-step model in this comprehensive evaluation of a biotech collaborative arrangement between BioTek and Farma to commercialize a drug compound.

Trending Topics

Presentation of Contract Assets and Contract Liabilities in ASC 606

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The Five-Step Method

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Input vs. Output Methods in ASC 606

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Revenue Recognition Over Time

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Standalone Selling Prices in ASC 606

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General Overview

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Implementing ASC 606

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Get practical answers for the most common questions on what to expect when implementing ASC 606's standards in your business.

Overview of ASC 606

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Collaboration between FASB and IASB resulted in ASC 606. Filers have choice between Full Retrospective and Modified Retrospective Adoption methods.

The Five-Step Method

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Summary of each of the five steps of ASC 606 and key issues entities need to consider when completing each step.

Transition Dates and Methods

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Stay up-to-date on an entity’s required ASC 606 transition date and its most beneficial transition method, which varies based on entity type and industry.

Step 1 : Contract

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Termination Clauses

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Termination clauses can impact the contract term, which has implications for all steps of the revenue model. Read about the most common issues that entities face related to termination clauses.

Combining Contracts

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Analysis and examples of the criteria for determining if contracts entered into with a customer at or near the same time must be combined for revenue recognition.

Collectibility of Consideration

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Analysis of the collectibility requirement of ASC 606, including accounting for contract's with initial and subsequent collectibility issues.

Contract Modifications
Part I – Separate Contracts

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Analysis of changes in the price or scope of a contract and whether they qualify as modifications and should be treated as a separate, standalone contract.

Step 2 : Performance Obligations

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Variable Consideration vs. Optional Purchases

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Understand the key differences between variable consideration and customer options for additional goods or services under ASC 606.

Distinct Goods or Services: Case Studies

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Three extended examples demonstrating the analyses for determining if goods or services are (1) capable of being distinct and (2) separately identifiable.

Customer Options for Additional Goods or Services

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Analysis and examples of how ASC 606 treats future discounts given to customers in a current sale, including diversity in thought and comparison to ASC 605.

Distinct within the Context of the Contract

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Analysis and examples of the new criteria under ASC 606 for identifying separate performance obligations as "distinct within the context of the contract".

Step 3 : Transaction Price

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Payments to Customers for Cooperative Digital Marketing

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Many digital marketing arrangements involve consideration payable to a customer. Learn whether such payments should be a reduction of revenue or a marketing expense.

Variable Consideration vs. Optional Purchases

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Understand the key differences between variable consideration and customer options for additional goods or services under ASC 606.

Consideration Payable to a Customer

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Analysis of ASC 606's treatment of payments paid to customers, including the payment types and the timing of recognizing a reduction in revenue.

Magnitude of the Constraint on Revenue

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Analysis and examples of ASC 606's requirement to constrain variable consideration based upon likelihood and magnitude, including diversity in thought.

Step 4 : Allocate Revenue

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Allocating Discounts

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Allocating variable and fixed discounts to the transaction price under ASC 606, includes significant changes from ASC 605 to ASC 606.

Allocating Variable Consideration in ASC 606

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Analysis and illustrative examples of the two criteria given in ASC 606 for allocating variable consideration to performance obligations.

Case Study: Estimating Standalone Selling Prices

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An extended example of applying the adjusted market assessment, expected cost plus margin, and residual approaches in estimating standalone selling prices.

Transaction Price Allocation: Case Study

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A comprehensive example of how transaction price is allocated to performance obligations, including cases involving variable considerations and discounts.

Step 5 : Recognize Revenue

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Bill-and-Hold Arrangements in ASC 606

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ASC 606's four criteria for determining bill-and-hold arrangements and when storage service represents a separate performance obligation.

Measuring Progress with Multiple Goods or Services in a Single Performance Obligation

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Analysis of step five of ASC 606’s model when a single performance obligation has multiple non-distinct promises, including restrictions, principles, and examples.

Case Study: Revenue Recognition Over Time for Products

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An extended example applying ASC 606's three criteria for recognizing revenue over time to goods and measuring revenue over time using inputs or outputs.

Consignment Arrangements

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Explanation and examples of the indicators that a consignment arrangement exists, including comparison to ASC 605.

CASE STUDIES »
Biotechnology contracts must be evaluated in microscopic detail with accounting standards in mind for the best chances of success.

Comprehensive Biotech Contract Evaluation: Case Study

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Walk through the five-step model in this comprehensive evaluation of a biotech collaborative arrangement between BioTek and Farma to commercialize a drug compound.

Revenue Disaggregation Disclosures: Alphabet Case Study

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Take a look at how early adopter, Alphabet Inc., disclosed its disaggregation of revenue in its financials, and see what the SEC had to say about it.

Revenue Disaggregation Disclosures: Ford Case Study

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Take a look at how early adopter, Ford Motor Company, disclosed its disaggregation of revenue in its financials, and see what the SEC had to say about it.

Case Study: Price Concessions

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This case study explains how to identify price concessions and recognize revenue for transactions that contain a price concession.

OTHER ISSUES »
The novel coronavirus has impacted businesses in many ways, leadning to changes in revenue recognition.

COVID-19 Impact on Revenue Recognition

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COVID-19 impacts much of the revenue model. Learn which parts of your revenue policy and procedures may need to be adapted in response to the recent pandemic.

Presentation of Contract Assets and Contract Liabilities in ASC 606

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Analysis and examples of contract assets and liabilities under ASC 606, including balance sheet presentation and implementation effects

SEC Comment Letters on ASC 606

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Top 10 most frequent ASC 606 topics in SEC comment letter threads with representative comment letter excerpts.

Overview of FASB’s Revenue Recognition Implementation Q&As

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Learn about the objectives and contents of the FASB’s newly released Revenue Recognition Implementation Q&As.

INDUSTRY-SPECIFIC ISSUES »
Vehicles produced by Automotive Industry, which has specific considerations related to ASC 606 accounts standards.

Common ASC 606 Issues: Automotive Entities

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Implementing ASC 606 requires a substantial amount of time and expertise, with specific challenges rising in each industry. Gain a deeper understanding of the key issues that automotive entities face as they transition to ASC 606.

Common ASC 606 Issues: Life Sciences Entities

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Implementing ASC 606 requires a substantial amount of time and expertise, with specific challenges rising in each industry. Gain a deeper understanding of the key issues that life sciences entities face as they transition to ASC 606.

Common ASC 606 Issues: Educational Not-for-profit Entities

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Implementing ASC 606 requires a substantial amount of time and expertise, with specific challenges rising in each industry. Gain a deeper understanding of the key issues that not-for-profit entities face as they transition to ASC 606.

Common ASC 606 Issues: Oil and Gas Entities

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Implementing ASC 606 requires a substantial amount of time and expertise, with specific challenges rising in each industry. Gain a deeper understanding of the key issues that oil and gas entities face as they transition to ASC 606.