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The new revenue recognition standard (ASC 606) outlines five steps for proper compliance.  At the surface, these steps seem simplistic.  However, there are many components that should be considered within each step based on your process and industry.  Previous courses in this series have covered the standard at a high level and evaluated step one and two of the standard.  They are:

  • Complying with the Revenue Recognition Standard
  • Revenue Recognition:Considerations for Identifying the Contract - Part One
  • Revenue Recognition:Considerations for Identifying the Contract - Part Two
  • Revenue Recognition:  Considerations for Performance Obligations – Part One
  • Revenue Recognition:  Considerations for Performance Obligations – Part Two
  • Revenue Recognition: Determine the Transaction Price Part One

This segment is designed to further evaluate Step Three of the new model dealing with determining the transaction price. The transaction price is the basis for measuring revenue. It is the amount of consideration the entity expects to be entitled  to in exchange for transferring promised goods or services. Determining transaction price requires election of policies and significant use of judgment. 

The new revenue recognition standard provides guidance on specific types of consideration.  This is the second part in a two-part segment that will evaluate the various concepts involved in determining the contract price. 

Learning Objectives

  • Explore how rights of return impact transaction price.
  • Identify how refund liabilities should be handled.
    • Explore examples related to rights of return and refund liabilities.
  • Explore how provisions that include a significant financing component impact transaction price.
    • Explore examples of significant financing components.
  • Explore how consideration payable to a customer impacts transaction price.
    • Explore examples on consideration payable to a customer.
  • Explore how sales based or usage royalties impact transaction price.
    • Explore examples of sales based and usage royalties.
Last updated/reviewed: October 9, 2018

Included In Certifications

This course is included in the following Certification Programs:

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

10 Reviews (66 ratings)Reviews

4
Anonymous Author
Good course for regular subscription price (not certification price). Benefited from taking all the courses. A lot of repetition could be viewed as reinforcing or redundant depending on how quickly can learn. Would rely on wording on slides more than those spoken, as less technically precise. Now have strong foundation in ASC 606.
4
Anonymous Author
Another great course from Lynn Fountain - full of examples to clarify the relevant guidance, moving at a great pace, and well organized to facilitate understanding. The series on revenue is an excellent learning opportunity.
5
Member's Profile
If you are in an entity with returns, royalties or consideration paid to customers, you need to take this course! If you have any financing arrangements over 1 year, you need to take this course!
5
Member's Profile
I highly recommend this course to anyone working in accounting. The class material is filled with lots of examples. Great class.
5
Member's Profile
Great course and material. It was very informative and the examples were excellent. My knowledge has significantly increased.
4
Member's Profile
another great course on revenue recognition. A must for everyone in financial reporting and accounting
5
Anonymous Author
Useful course for those who work with revenue and all accounting professionals in general.
5
Anonymous Author
Lynn makes the material so easy to learn, with all of her excellent examples!
5
Member's Profile
Good overview of the effects on transaction price under the new standard.
5
Member's Profile
Good overview of the effects on transaction price under the new standard.

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
  2:17Introduction to Revenue Rec: Determine the transaction price Part 2
  1:51Transaction Price
  7:51Rights of Return
  6:54Example
  14:44Significant Financing Scoring
  5:32Consideration Payable to Customer
  3:33Example: Consideration Payable to Customer
  11:58Sales Based or Usage Based Royalties
  1:14Summary
CONTINUOUS PLAY
  55:54Revenue Rec: Determine the transaction price Part 2
SUPPORTING MATERIALS
  PDFSlides: Revenue Rec: Determine the transaction price Part 2
  PDFRevenue Rec: Determine the transaction price Part 2 Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM