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This is the second course in the ongoing series evaluating the (ASC 606) Revenue Recognition Standard.  This course relates to step two of the standard “Considerations for Performance Obligations”.  Part 1 evaluated the concept of distinct and non-distinct goods and services and how they related to performance obligations.

Properly identifying performance obligations is a critical step in the five-step revenue recognition model.  It is a step that must be completed at the inception of the contract and prior to moving on to step three of the model.  As discussed in segment one on performance obligations, there are many types and variations of obligations and as such, management will be required to utilize significant judgment when applying this step.  However, it is important that the judgment be supported by considerations of the proper factors.

The course further evaluates areas that impact performance obligations.  We utilize multiple examples from various industries to illustrate the considerations that must be evaluated in line with both identifying performance obligations and allocating the transaction price appropriately. 

 

Learning Objectives

  • Explore the concept of revenue recognition related to performance obligations that may involve components such as:
    • Options to purchase additional goods/services
    • Identifying material rights
    • Shipping and handling charges
  • Identify and examine factors impacting performance obligations including:
    • Principal vs. agent status
    • Warranties
    • Options for additional goods and services
    • Non-refundable up-front fees
    • Stand-ready obligations
    • Rights of returns
Last updated/reviewed: November 20, 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

16 Reviews (58 ratings)Reviews

5
Member's Profile
These are very specific materials that need to be understood to properly handle situations affecting performance obligations. Great course but be ready to focus!
4
Member's Profile
some of the detailed issues touched upon (contract modifications for sure) were not really fully explained. specific to contract mods, I did not feel the accounting example with the numbers/amounts was sufficiently explained to help us understand what was happening and why the percentages of allocation did not add up to 1
2
Member's Profile
The contract modification example in the presentation is very confusing. The percentages do not seem to add up correctly. This should be changed so that it is better explained how the numbers are derived.
4
Member's Profile
Good explanations and examples of applying to ASC 606. Examples incorporates many concepts beyond just Step 2, despite title/focus of the course so that may confuse some.
5
Member's Profile
The course is very informative and provides great insight into the considerations for performance obligations. I would highly recommend this course.
4
Anonymous Author
I appreciate the examples walking through different scenarios and showing the related math. This helps drive home the theory behind the guidance.
3
Anonymous Author
The examples of calculating the SSP and determining the deferred amounts are not clear. I watched couple of u tube videos to understand it.
5
Anonymous Author
The examples that were given by Lynn were very accurate and easy to understand. I feel that I am truly getting a grasp of the material!
5
Anonymous Author
The material is well organized. Provided many good examples. The instructor explained the concepts very well.
3
Member's Profile
Material Rights section needs cleaning-up & elaboration. Numbers didn't look right in all slides.
4
Member's Profile
A lot of information in this module. Good examples included but I could use even more,
4
Member's Profile
Good examples for material rights and principle vs agent considerations
5
Member's Profile
Great course, offers some good examples, highly recommend.
4
Anonymous Author
great continuation from part 1. great choices of examples
4
Member's Profile
great course on performance obligations, very thorough
5
Member's Profile
Good overview of material rights. Lots of examples.

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
  1:40Introduction to Revenue Rec: Considerations for Performance Obligations Part 2
Performance Obligations
  7:00Options to Purchase Additional Goods/Services at Discount
  9:25Material Rights
  8:36Material Rights (Continued)
  3:07Shipping and Handling
  3:10Principal vs. Agent
  4:55Principle vs. Agent Changes From Past Standards
  5:56Warranties
  4:31Additional Goods/Services
  7:32Up-Front Fees
  8:09Example Up-Front Fees
  4:44Stand-Ready Fee
CONCLUSION
  6:46Rights of Return
CONTINUOUS PLAY
  1:15:32Revenue Rec: Considerations for Performance Obligations Part 2
SUPPORTING MATERIALS
  PDFSlides: Revenue Rec: Considerations for Performance Obligations Part 2
  PDFRevenue Rec: Considerations for Performance Obligations Part 2 Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM