This course is dedicated to the evaluation of case scenarios related to Step Four and Five of the revenue recognition model. Step Four entails “Allocating the Transaction Price to Performance Obligations”. Step Five entails “Recognizing Revenue”. Previous courses have outlined each of the individual five steps of the model and provided case examples. We have also developed two broad case study courses that cover scenario examples for each of the five steps.
In order to focus directly on aspects within each step, individual courses have been created with multiple case scenarios that apply to the individual given steps. This course includes the many considerations companies must take into account when determining how to allocate the transaction price to performance obligations and then move to the final step of recognizing revenue. We review the concepts of allocation methods and methods to estimate stand-alone selling price. We also discuss aspects involved in recognizing revenue including accounting for discounts, variable consideration and how to recognize revenue over time versus at a point in time.
After taking this course, you should be able to effectively apply your understanding of Step Four and Five of the revenue recognition model to specific scenarios within your business. Each learning objective listed utilizes multiple examples from various industries to help interpret and practice the concept.
Learning Objectives
- Identify important components involved in Step Four – Allocate transaction price to Performance Obligations (PO).
- Explore the various estimation approaches for determining stand-alone selling price (SSP) outlined by the standard.
- Identify how to allocate discounts between performance obligations.
- Explore concepts of variable consideration.
- Explore elements of Step Five – recognize revenue.
- Identify how to recognize revenue over time vs. at a period of time.
- Identify methods for measuring progress towards completion of a project including input method and output method.
- Explore concepts of enforceable right of payment.
- Identify components necessary when a right of return exists.
Included In Certifications
This course is included in the following Certification Programs:
15 CoursesRevenue Recognition Certification
- Overview of Complying with the ASC 606 Revenue Recognition Standard
- ASC 606 Revenue Recognition: Considerations for Identifying the Contract Part 1
- ASC 606 Revenue Recognition: Considerations for Identifying the Contract Part 2
- ASC 606 Revenue Recognition: Considerations for Performance Obligations Part 1
- ASC 606 Revenue Recognition: Considerations for Performance Obligations Part 2
- ASC 606 Revenue Recognition: Determining the transaction price Part 1
- ASC 606 Revenue Recognition: Determining the transaction price Part 2
- ASC 606 Revenue Recognition: Allocating transaction price to performance obligations
- ASC 606 Revenue Recognition: Recognizing Revenue
- ASC 606 Revenue Recognition: Case Scenarios for Identifying the Contract
- ASC 606 Revenue Recognition: Case Scenarios for Performance Obligations
- ASC 606 Revenue Recognition: Case Scenarios for Transaction Price
- ASC 606 Revenue Recognition: Case Scenarios for Allocating Transaction Price & Recognizing Revenue
- ASC 606 Revenue Recognition: Case Scenarios for 5 Step Revenue Recognition Process Part 1
- ASC 606 Revenue Recognition: Case Scenarios for 5 Step Revenue Recognition Process Part 2
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Prerequisites
No Advanced Preparation or Prerequisites are needed for this course. However, it is recommended to take the other courses in the series prior to completing this one.
Dear Mrs. Fountain,
Regarding the recognition of revenue, I have a PO for 02 same instruments, each instrument is independent from each other, only same pricing deal. Our customer requested to stage the shipment that one instrument ship in Q3 and the second one is to be shipped in Q4. We are in Q3 close, can we recognize the revenue for the first instrument that we already shipped?
Sincerely yours,
Han Vu
I am sorry but Illumeo does not allow us to provide consulting advice. I can only speak to questions directly related to course material