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On May 28, 2014, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) issued converged guidance on recognizing revenue in contracts with customers (ASC 606).  The objective of the guidance is to establish principles to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue from contracts with customers.  The new guidance provides several benefits to financial statement users.  Entities applying the new standard for contract revenue recognition will follow five steps:

  • Identify the contract with the customer
  • Identify performance obligations
  • Determine transaction price
  • Allocate transaction price to performance obligations
  • Recognize revenue when each performance obligation is satisfied

Although these steps may seem simplistic at the surface, within each step are multiple components and considerations users must be aware of.  This course will delve into the many concepts involved in Step One:  Identifying the contract.

The course utilizes many examples from numerous industries to enhance learning of the various concepts.

Learning Objectives

  • Recognize how elements of the new revenue recognition standard differ from the previous standard.
  • Explore various criteria in the step “Identify the Contract" including:
    • Approval/commitment of parties
    • Identification of rights of parties
    • Payment terms can be identified
    • The contract has commercial substance
    • Collection is probable
  • Identify when a contract modification requires a new contract or can be combined with the original contract.
  • Explore accounting for non-contract modifications.
  • Explore accounting for contract modifications.
Last updated/reviewed: October 31, 2017

Included In Certifications

This course is included in the following Expert Certifications:

15 CoursesRevenue Recognition Certification

  1. Overview of Complying with the ASC 606 Revenue Recognition Standard
  2. ASC 606 Revenue Recognition: Considerations for Identifying the Contract Part 1
  3. ASC 606 Revenue Recognition: Considerations for Identifying the Contract Part 2
  4. ASC 606 Revenue Recognition: Considerations for Performance Obligations Part 1
  5. ASC 606 Revenue Recognition: Considerations for Performance Obligations Part 2
  6. ASC 606 Revenue Recognition: Determining the transaction price Part 1
  7. ASC 606 Revenue Recognition: Determining the transaction price Part 2
  8. ASC 606 Revenue Recognition: Allocating transaction price to performance obligations
  9. ASC 606 Revenue Recognition: Recognizing Revenue
  10. ASC 606 Revenue Recognition: Case Scenarios for Identifying the Contract
  11. ASC 606 Revenue Recognition: Case Scenarios for Performance Obligations
  12. ASC 606 Revenue Recognition: Case Scenarios for Transaction Price
  13. ASC 606 Revenue Recognition: Case Scenarios for Allocating Transaction Price & Recognizing Revenue
  14. ASC 606 Revenue Recognition: Case Scenarios for 5 Step Revenue Recognition Process Part 1
  15. ASC 606 Revenue Recognition: Case Scenarios for 5 Step Revenue Recognition Process Part 2

18 Reviews (79 ratings)Reviews

4
Member's Profile
instruction pretty good and slide content okay, however there are several grammatical and/or pronoun errors on the slides that caused confusion of the rev rec facts being considered and explained. also examples were almost always repeats of other courses so unfortunately we are not getting additional insight to the new rev rec standard and application of same in real world examples
4
Member's Profile
The new revenue recognition guidance is clearly and carefully discussed and this is a good overview. However, more compare/contrast could be particularly helpful when thinking about modifying revenue recognition practices. The instructor thorough and very clear. I also really like that she connects concepts to underlying principles/definitions.
4
Member's Profile
Lynn does an excellent job in taking her time explaining the concepts of the new Revenue Recognition standard. At times she can be a little slow in the pace of the presention, but she does cover it in fair detail. I would have liked to see some financial reporting implications, journal entries, etc. Overall a great introduction to the topic.
4
Member's Profile
Compare contrast section is not well written. It could use more clear "here is what last standard looked like" and "here is the new standard" even a table would be great.
5
Member's Profile
Very good points on applying Step 1 of ASC 606. Even more valuable point (money-saving idea) on how to pay much less than billed for health care (that I know works).
4
Member's Profile
It appears that defining the terms are half the battle, so these courses that delve into each step are helpful for the overall understanding of the standard.
5
Member's Profile
Ms. Fountain is engaging and clear. Her examples make this complex subject easy to understand and apply to one's own industry. Highly recommended.
5
Member's Profile
The review was very informative and I gathered a significant amount of knowledge from the material. I was surprised at the depth of the course.
5
Anonymous Author
Lynn's notes and lecture were very easy to follow and straightforward, and it really made learning the material very efficient for me.
4
Member's Profile
Good examples covering considerations for each step and very informative, especially on collectability
5
Member's Profile
A good follow-up to the overview course giving more detail and examples for contract identification.
4
Member's Profile
Could be shortened. The lessons seem to have been extended just for the sake of extension.
5
Member's Profile
Good discussion of the criteria to identify whether or not a contract exists.
5
Member's Profile
Good introduction to the nuances of contracts with the new standard.
5
Anonymous Author
The course is easy to follow, the instructor has some good examples.
4
Member's Profile
I felt this course need more examples to serve different industries
5
Member's Profile
this course was very informative. great use of examples
4
Member's Profile
great, everyone should take it from controllers to CFO

Prerequisites

Course Complexity: Intermediate

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.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  3:33Introduction to Revenue Rec: Considerations for Identifying the Contract – Part 1
  4:08What is Revenue
  11:14Contrast With Previous Standards
  8:16Identifying The Contract
  3:49Step One: Contract Criteria
  15:40Approval and Commitment
  4:24Identifiable Terms
  2:52Commercial Substance
  14:51Collection Probability
CONTINUOUS PLAY
  1:08:48Revenue Rec: Considerations for Identifying the Contract – Part 1
SUPPORTING MATERIALS
  PDFSlides: Considerations for Identifying the Contract – Part 1
  PDFRevenue Rec: Considerations for Identifying the Contract – Part 1 Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM