Instructor for this course
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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

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
  3:45Options 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
  1:12:19Revenue 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