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.
Contract Modifications Part I – Separate Contracts
Analysis of the two options for treatment of contract modifications under ASC 606: (1) treated as a modification or (2) treated as a separate, standalone contract.
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.
Identify the Contract
The first step of ASC 606 is to identify the contract with a customer. ASC 606 outlines many criteria, including legal enforceability and collectability.
Contract Modifications Part II - Contract Modification Treatment
The prospective treatment method vs. the cumulative catch-up adjustment method of applying contract modification treatment under ASC 606.
Scope of ASC 606 and Interaction with Other Guidance
Analysis of the scope considerations of ASC 606 and how ASC 606 interacts with other guidance, including an example of a transaction with mixed guidance.
Contract Modifications Part III - The Hindsight Expedient
Analysis of ASC 606's practical expedient for contract modifications -- to use hindsight to account for all contract modifications at once.
Definition of a Customer
Analysis of the updated definition of a customer in ASC 606's scope considerations, including examples of common transactions in a business context.
Collectibility of Consideration
Analysis of the collectibility requirement of ASC 606, including accounting for contract's with initial and subsequent collectibility issues.