Step 3 : Transaction Price

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.

In transactions, payments paid to customers must be addressed following revenue recognition guidelines from ASC 606.

Noncash Consideration

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Determine the transaction price of a contract with noncash consideration under ASC 606, including when and how to measure the variable consideration caused by fluctuating fair value.

Noncash consideration in the context of a contract influences the contract transaction price under ASC 606.

Nonrefundable Upfront Fees

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Analysis of revenue recognition for nonrefundable upfront fees under ASC 606, including when the fees relate to specific performance obligations or material rights.

ASC 606 provides guidance for recognizing revenue from nonrefundable upfront fees.

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.

Cooperative digital marketing often involves payments to customers that require special considerations under ASC 606.

Price Concessions in ASC 606

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Analysis and examples of price concessions based on either the customer's expectation or the company's intent

The ASC 606 revenue standard provides guidance for accounting for price concessions in transactions.

Rights of Return and Customer Acceptance in ASC 606

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Depending on the type, a right of return may be a variable consideration under ASC 606.

The approach to treatment of returns of good by customers is different in ASC 606.

Significant Financing Component in ASC 606

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Analysis and examples of when a significant financing component exists in a contract and how to account for it under ASC 606.

Business transactions often carry a significant financing component as payment occurs before or after goods or services are delivered.

Variable Consideration and the Constraint

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Analysis and example of estimating variable consideration and applying the constraint under ASC 606.

For contracts that include a variable amount of consideration, entities must estimate the amount of consideration to which it expects to be entitled and use that amount as the transaction price for allocating to different performance obligations.

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.

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

Volume Discounts in ASC 606

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Analysis and examples of estimating the transaction price of a contract with volume discounts under ASC 606.

Products like these light bulbs are often sold with discounts when sold at large volumes; accounting for these volume discounts requires special considerations under ASC 606.