Step 5 : Recognize Revenue

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.

Vendor and customer coordination in bill-and-hold arrangements leads to important considerations in revenue recognition.

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.

Determining the Transfer of Control

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Criteria for revenue recognition at a point in time, including situations such as bill-and-hold, and consignments.

Input vs. Output Methods in ASC 606

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Analysis of the input and output methods to measure progress towards completion of a performance obligation satisfied over time in ASC 606

Construction contracts often fall under the circumstances outlined in the ASC 606 revenue recognition standard where either the input or output method is acceptable for measuring progress toward completion of a contract.

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.

Partially Satisfied Performance Obligations at Contract Inception

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Analysis of ASC 606's treatment of revenue and costs from performance obligations partially completed before the contract establishment date

The timing of performance obligations related to the timing of a contract can lead to complicated revenue recognition considerations under ASC 606.

Repurchase Agreements in ASC 606

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ASC 606 provides guidance on accouting for repurchase agreements including forwards, call options, and put options; examples illustrate how the standard is applied to repurchase agreements.

Contracts with repurchase agreements such as machine part manufacturing contracts require special accounting considerations under the ASC 606 revenue recognition standard.

Revenue Recognition Over Time

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Description of the three criteria in ASC 606 for determining whether revenue is recognized over time. Illustrative examples of each criterion are included.

A clock represents the time aspect of recognizing revenue over time under the criteria stipulated in ASC 606.

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.

Unexercised Rights in ASC 606

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Analysis and examples of how customers' unexercised rights (breakage) affect how the transaction price is allocated to performance obligations

Sometimes customers do not require entities to meet contractual performance obligations related to the delivery of goods or services; the ASC 606 revenue standard provides guidance on how to handle these situations.