Instructor for this course
more

This course is a continuation of the discussion of Step One in the (ASC 606) revenue recognition process: Identifying the Contract.  Specifically, this session delves further into the considerations surrounding contract modifications, change orders, unpriced change orders, cancellations, non-finalized changes and accounting treatment when a contract does not exist.

On May 28, 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued converged guidance on recognizing revenue in contracts with customers.  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

 

 

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

Learning Objectives

  • Explore the components and requirements around contract modifications.
  • Identify methods to determine contract modification status.
  • Explore accounting considerations for contract modifications.
  • Identify methods to account for unpriced change orders.
  • Explore modifications that fall under the cumulative catch-up accounting rules.
  • Explore accounting for non-finalized contract changes.
  • Explore accounting for contract cancellations.
  • Identify accounting treatment when it is determined a contract does not exist.
  • Explore the concept of contract combinations.

1 Review (6 ratings)Reviews

5
Member's Profile
Great detail - very helpful for preparing to use 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
  2:12Introduction to Revenue Rec: Considerations for Identifying the Contract – Part 2
  6:31Contract Modifications
  6:53Determination of Modification Status
  8:39Accounting Considerations
  10:31Example 2
  3:55Example: Unpriced Change Order
  9:05Example Modifications: Cumulative Catch Up
  1:28Non-Finalized Changes
  2:30Cancellation Rights
  5:40Accounting When No Contract Exists and Examples
  4:42More Examples
  1:52Summary
CONTINUOUS PLAY
  1:03:56Revenue Rec: Considerations for Identifying the Contract – Part 2
SUPPORTING MATERIALS
  PDFSlides: Revenue Rec: Considerations for Identifying the Contract – Part 2
  PDFRevenue Rec: Considerations for Identifying the Contract – Part 2 Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM