Revenue Recognition (ASC Topic 606): Disclosure Requirements “Contracts with Customers”

<p>Investors and other financial statement have provided comments to the SEC on revenue-related disclosures. They felt the standard did not provide sufficient detail to perform detailed analysis.</p>

<p>One of the goals of the new standard is to introduce disclosure requirements that improve the information communicated in financial statements.</p> 

<p>The new standard requires additional disclosures to better communicate the nature, amount, timing, and uncertainty of an entity’s revenue and cash flows (ASC 606-10-50-1). Filers are required to provide qualitative and quantitative information about the following:

<ul>

<li>Contracts with customers</li>

<li>Significant judgments made in applying the new standard</li>

<li>Assets recognized from the costs to obtain or fulfill a contract</li>

</ul></p>

<p>An entity is required to disclose revenue recognized from contracts with customers as well as impairment losses on any contract assets arising from those contracts. Disclosure is required unless these amounts are presented separately on its financial statements.</p>

<p><b>Topics Covered:</b>

The standard also requires information about the following categories: 

<ul>

<li>Disaggregation of revenue,</li> 

<li>Contract balances, </li>

<li>Performance obligations</li>

</ul></p>

<p>This session will deal directly with disclosure requirements for the standard. Several courses currently exist on the platform related to an overview of the standard and deep dive into individual steps of the standards.</p>