On May 28, 2014, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) issued converged guidance on recognizing revenue in contracts with customers (ASC 606).  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

Although these steps may seem simplistic at the surface, within each step are multiple components and considerations users must be aware of.  This course will delve into the many concepts involved in Step One:  Identifying the contract.

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

Note: Information within this course comes from readily available public domain documents and is utilized by the trainer as a supplement for relaying the course content.

Resources Consulted:
• ASC 606-10-32-15 to 32-20, 55-244 to 55-246.
• ASU 2014-09: “Revenue from Contracts with Customers.” BC229-BC247.
• Croner-I, “A14 Revenue from Contracts with Customers.” (2019). Section 7.4.2-2 and 7.4.2-2.
• FASB, ”Revenue Recognition Implementation Q&As.” January 2020). Questions 31-37.
• FASB TRG Memo 20: “Significant Financing Components.” 26 January 2015.
• FASB TRG Memo 30: “Significant Financing Components.” 30 March 2015.
• EY, Financial Reporting Developments: “Revenue from contracts with customers.”January 2020. Section 5.5.
• KPMG, Handbook: “Revenue Recognition.”December 2019. Section 5.5.
• PWC, “Revenue from contracts with customers”March 2020. Section 4.4.
https://www.revenuehub.org/

Learning Objectives
  • Recognize how elements of the new revenue recognition standard differ from the previous standard.
  • Explore various criteria in the step “Identify the Contract" including:
    • Approval/commitment of parties
    • Identification of rights of parties
    • Payment terms can be identified
    • The contract has commercial substance
    • Collection is probable
  • Identify when a contract modification requires a new contract or can be combined with the original contract.
  • Explore accounting for non-contract modifications.
  • Explore accounting for contract modifications.
Last updated/reviewed: August 26, 2023

Included In Certifications

This course is included in the following Certification Programs:

17 CoursesRevenue Recognition Certification

  1. Revenue Recognition (ASC Topic 606) Standard Overview
  2. Revenue Recognition (ASC Topic 606): Identify The Contract Part 1
  3. Revenue Recognition (ASC Topic 606): Identify The Contract Part 2
  4. Revenue Recognition (ASC Topic 606): Performance Obligations Part 1
  5. Revenue Recognition (ASC Topic 606): Performance Obligations Part 2
  6. Revenue Recognition (ASC Topic 606): Transaction Price Part 1
  7. Revenue Recognition (ASC Topic 606): Transaction Price Part 2
  8. Revenue Recognition (ASC Topic 606): Allocating Transaction Price
  9. Revenue Recognition (ASC Topic 606): Recognize Revenue
  10. Revenue Recognition (ASC Topic 606): Scenarios For Identify The Contract
  11. Revenue Recognition (ASC Topic 606): Scenarios For Performance Obligations
  12. Revenue Recognition (ASC Topic 606): Scenarios For Transaction Price
  13. Revenue Recognition (ASC Topic 606): Scenarios For Transaction Price And Recognize Revenue
  14. Revenue Recognition (ASC Topic 606): Case Scenarios Part 1
  15. Revenue Recognition (ASC Topic 606): Case Scenarios Part 2
  16. Revenue Recognition (ASC Topic 606) COVID Implications
  17. Revenue Recognition (ASC Topic 606): Disclosure Requirements “Contracts with Customers”
121 Reviews (501 ratings)

Reviews

4
Anonymous Author
Когда весь мир движется в сторону международных стандартов финансовой отчетности, америка выпускает свои собственные стандарты. Надеюсь, что мой кругозор расширился до невообразимых размеров!

5
Anonymous Author
Everything is making sense but I guess what I'm struggling with is how to identify the "differences" between ASC 606 vs previous version. I felt like all the things that you said existed before. I was wondering if there is a summary/table available where I can clearly see the difference in transaction treatment between ASC 606 and the old version.

4
Member's Profile
The new revenue recognition guidance is clearly and carefully discussed and this is a good overview. However, more compare/contrast could be particularly helpful when thinking about modifying revenue recognition practices. The instructor thorough and very clear. I also really like that she connects concepts to underlying principles/definitions.

4
Member's Profile
Lynn does an excellent job in taking her time explaining the concepts of the new Revenue Recognition standard. At times she can be a little slow in the pace of the presention, but she does cover it in fair detail. I would have liked to see some financial reporting implications, journal entries, etc. Overall a great introduction to the topic.

5
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
Member's Profile
I am currently a Director of Revenue Recognition. This is a great overview for folks unfamiliar with revenue recognition. However, this course is not substantive enough to prepare students for the complexities of real-world contracts. The examples provided in the course are very simplistic.

4
Anonymous Author
The author continues to assist in trying to understand the application of "big" GAAP to the companies that the majority of CPAs service. It would be nice if our governing boards would notice that the application of Big GAAP is .... to real companies.

4
Anonymous Author
the course was a little bit confused, and after I listened to the course, I still am a little unfamiliar with the revenue recognition step 1,and do not know the first step in getting started to recognize revenue. Hope the language be more clear!

4
Anonymous Author
There were lots of great examples that helped make the training easier to understand. It was also good that the this topic has been broken down into bite size pieces making it easier to digest and gain a better understanding of the material.

5
Anonymous Author
The instructor does a great job of providing additional commentary to the training. She gives real life, easy to follow examples that provide clarity on the topic. Overall a great presentation on a deep dive into Step 1 of ASC 606.

5
Anonymous Author
Very helpful in understanding the specifics of Step 1 of the revenue recognition model, which at first sight seems to be the easiest of the 5 steps but actually has a lot of technicalities to it which are explained in this video.

5
Anonymous Author
Great course! Good to know the distinction between "revenue" and "income". This course showed me the criteria to identify a contract. I think this course is beneficial not only to finance teams, but also any sales team.

5
Anonymous Author
This was a great discussion of the components of a having a contract under the new revenue recognition criteria. This is definitely a good course to understand the basic contract under revenue recognition.

5
Member's Profile
This course was especially valuable for me. I am taking my first contracting class at a community college. It was great exposure to the issues regarding contracts and revenue. I look forward to Part 2.

5
Member's Profile
Another great ASC606 course in the series. Lynn has this grouping of courses that are a must if you need to understand in a comprehensive way, the ASC606. On to part 2 - I love her courses. Larry

5
Anonymous Author
This was very helpful in learning about contracts and when they are able to be used for rev rec and when they do not meet the requirements. There was a lot more that goes into than expected.

5
Member's Profile
A very detailed overview of the requirement and considerations for identifying the contract. I liked all the examples. The presentation was very well organised, concise and to the point.

5
Anonymous Author
This is a thorough review of the fundamental elements of Step 1 - Identify the Contract. It was very helpful and easy to follow. I recommend course as a primer or quick review.

4
Anonymous Author
The presentation was clear and concise - very good presenter. The subject matter was dry - to no fault of the presenter. More audience engagement would have been appreciated.

5
Anonymous Author
Great overall course. Was helpful in understanding and brushing up on the basics of ASC 606. I liked the examples they helped to look at the material in real life situations.

5
Anonymous Author
This course was a refresher of "Overview of Complying with the ASC 606 Revenue Recognition Standard". The instructor was very effective in presenting the course materials.

5
Member's Profile
The examples were excellent. there should be more multiple choice questions in the review questions then the final exam since there is a lot of material to fully understand

5
Anonymous Author
This course provided a fantastic overview of the fitst step in the new standard. I was pleasantly surprised at the way the old guidance and new guidance were presented.

4
Anonymous Author
The course was very informative and helped better understand the nuances and criteria related to Step 1 of the new ASC 606 rev rec standard. Examples were very insightful.

4
Member's Profile
Compare contrast section is not well written. It could use more clear "here is what last standard looked like" and "here is the new standard" even a table would be great.

3
Member's Profile
Would have preferred this as a text based course. It is difficult for me to stay committed to a video course. While a text based course I can go back to and refer to.

5
Member's Profile
Excellent description of the criteria for identifying a contract. Example transactions were excellent and made the criteria language much easier to understand.

5
Anonymous Author
This instructor provides and clear and well organized review of this section of the revenue recognition rules. Examples given are relevant and understandable.

4
Anonymous Author
Good course overview of ASC 606 contract identification. Several examples were used to held illustrate when a contract (revenue) exists and when it does not.

4
Member's Profile
It appears that defining the terms are half the battle, so these courses that delve into each step are helpful for the overall understanding of the standard.

5
Member's Profile
This course was great for me, I now understand the contract criteria which include approval and commitment, rights of the parties, payment terms and other

3
Member's Profile
wish there were more detailed examples. examples provided besides the one about wash trades seemed too basic to encounter in a real fortune 500 business

5
Member's Profile
Ms. Fountain is engaging and clear. Her examples make this complex subject easy to understand and apply to one's own industry. Highly recommended.

5
Anonymous Author
Lots of good information and examples. I am hoping to get more information on what constitutes a customer as it relates to partnership activities.

5
Anonymous Author
k,dsj glkjflk j;gdsjflkfdjg ljd dgflkdlgfjh ldsjgflj ldfjglkjfd lhlkjfd glkjsflkd'fkj b j;o gijbnfdskjnb kdsnfskjnb nfdkbn kbdkjndsb kjnd bfkjnkjn

5
Anonymous Author
Great course. Stated learning objectives were met. Program materials were relevant and contributed to the achievement of the learning objectives.

5
Member's Profile
The review was very informative and I gathered a significant amount of knowledge from the material. I was surprised at the depth of the course.

5
Anonymous Author
I liked that it broke down step one of 606 into great detail to really understand the terms and conditions of a contract under the guidance.

5
Member's Profile
Good and clear explanation and I can understand it clearly. But I suggest if there is subtitles in the video, then it would be even better.

4
Member's Profile
A lot to know about ACS606. Quite detailed lecture re: definition of the contract in this newer standard. One of the best instructors here.

5
Anonymous Author
Using examples that are stated in the Standard were not as helpful as the more original examples, such as the sale of the car to your son.

4
Anonymous Author
I think this course is very good for beginners and takes the appropriate time to address all industry terms and define them one by one.

5
Anonymous Author
Lynn's notes and lecture were very easy to follow and straightforward, and it really made learning the material very efficient for me.

3
Member's Profile
Presentation of information comparing and contrasting new standard to old one could have been organized better in slide presentation.

4
Member's Profile
Great overall lecture on the specifics of this topic including examples. Discussed in detail all the parts to identifying a contract.

5
Anonymous Author
Very nicely explained with appropriate examples. The lecture is broken into parts which can be understood easily with no confusion.

5
Member's Profile
This was a good expansion on the basic training, a nice deep dive into the elements of the first step of identifying the contract.

5
Anonymous Author
The course provided a good, informative discussion of what to look out for when trying to identify if a customer contract exists.

5
Anonymous Author
Revenue recognition: Identify the contract part is a great course. I learned a lot from the new revenue recognition standard.

5
Anonymous Author
This course is really necessary to get a better understanding of the new revenue recognition standard specifically step one.

4
Anonymous Author
The course gave a picture of how to identify if a contract is as per the new standard, what constitutes a complete contract.

5
Anonymous Author
I was pleased with the result of this course and plan to continue studying this issue. Thank you very much. Good day sir!

5
Anonymous Author
Very helpful to gain more understanding of the new revenue standard. I hope there will be a course specific to NPOs.

4
Anonymous Author
This course assisted in identifying a contract, contract criteria, rights vs obligations among many other topics.

5
Member's Profile
Overview course with clear presentation and examples. Presents the segment of the new guidance knowledgeably.

5
Member's Profile
Once again, Lynn did an excellent job walking through the concepts in an understandable, yet detailed, manner.

5
Member's Profile
Another great course by Lynn. The ASC 606 Part 1 course includes helpful and practical interpretive guidance.

4
Member's Profile
I really liked the course, because it in simple terms explains fundamentals behind the new revenue standard.

5
Member's Profile
Great information about the nuances of contracts under ASC 606 and revenue recognition for customer contracts

5
Anonymous Author
I sincerely appreciate you for the training. good course. looking forward to next part of training. thank you

5
Member's Profile
The course was explained clearly. I enjoyed learning the criteria needed for a valid enforceable contract.

5
Anonymous Author
The presentation is broken down into understandable sections. It is clear with easy-to-follow examples.

5
Anonymous Author
Great overview and detail explanation of concept with easy to understand example. This was very helpful.

5
Member's Profile
The material was presented very effectively, and I'm looking forward to additional modules on this topic

5
Member's Profile
I liked the examples and the detail in using words and phrases strait from the text of the new standard.

5
Anonymous Author
This course provides a sufficient level of content to understand the first step in the revenue standard.

4
Member's Profile
Good examples covering considerations for each step and very informative, especially on collectability

5
Anonymous Author
It provides a good summary of identifying a contract and the examples provided are easy to understand.

5
Anonymous Author
Very good course for a beginner in know the complexities of revenue recognition in a very simple way

5
Member's Profile
A good follow-up to the overview course giving more detail and examples for contract identification.

5
Member's Profile
Very detailed and informative. Great as a review of the guidance or to supplement current education.

5
Member's Profile
Great overview of rev rec criteria under a new guidance. Very good examples and clear explanation.

5
Anonymous Author
This course was very well organized and the instructor was easy to understand. I would recommend.

5
Anonymous Author
A very well presented discussion of the topic. Interesing examples helped to provide clarity.

5
Anonymous Author
Great deep dive into contract issues arising from ASC606. Gives great real-world type examples.

5
Member's Profile
Good course on revenue recognition and the new and updated standards which are needed to be met.

5
Anonymous Author
As usual, the presenter does a great job in explaining the material in an organized fashion.

4
Member's Profile
Could be shortened. The lessons seem to have been extended just for the sake of extension.

5
Anonymous Author
Useful course for those who work with revenue and all accounting professionals in general.

4
Anonymous Author
Another great course on revenue recognition, a great refresher and with valuable insight.

4
Member's Profile
I learn how to compare/contrast elements of the new standard with the previous standard.

5
Anonymous Author
This course was fine for what it is. Very helpful to entry level revenue accountants.

5
Member's Profile
Very technical and informative. Really appreciated the industry insights at the end.

5
Anonymous Author
Course subject was clear. Examples are the most helpful in applying the knowledge.

5
Anonymous Author
The information in this course is laid out in a logical, easy to understand manner.

4
Anonymous Author
this is the third time completing this so i dont understand why its not advancing

5
Member's Profile
Great job in breaking down contracts and providing easy to understand examples.

5
Member's Profile
Very knowledgeable presenter and communicated in appropriate degree of detail.

5
Member's Profile
Good discussion of the criteria to identify whether or not a contract exists.

5
Member's Profile
Good detail on what constitutes a contract. Information is clear and concise.

5
Anonymous Author
Helpful material and great examples. Simple language and easy to understand.

5
Anonymous Author
Amazing content and easy to understand examples to master the core concepts.

4
Member's Profile
Great substance here, Lynn really knows how to break the concepts down.

5
Anonymous Author
Very well instructed and really useful content within the class........

5
Member's Profile
Effective and relevant information. Instructor provided great examples!

4
Member's Profile
clear and simple explanation of what a contract is for purposes of 606

5
Anonymous Author
Good overview and summary of complex rules. The slides were helpful.

5
Anonymous Author
I liked the examples used in the presentation to explain the points.

5
Member's Profile
The slides included all the necessary info to understand this topic.

5
Member's Profile
Good introduction to the nuances of contracts with the new standard.

5
Anonymous Author
The course is easy to follow, the instructor has some good examples.

5
Member's Profile
great course i found this course to be very informative on contracts

5
Member's Profile
Good course. Well constructed and presented. Met course objectives.

4
Member's Profile
I felt this course need more examples to serve different industries

3
Anonymous Author
It would be great if we can have more examples for SaaS products.

5
Anonymous Author
Excellent information and examples to help understand the concepts

5
Anonymous Author
The materials are clear with great examples and good explanations.

4
Anonymous Author
Pretty good general overview of first step. I like the examples.

4
Anonymous Author
informative course about the new practice on revenue recognition

4
Anonymous Author
The material in this course is of great use. Highly recommended.

4
Anonymous Author
The course was very helpful in providing an overview of Step 1.

5
Member's Profile
I like the video commentary and the examples that are reviewed.

5
Anonymous Author
Good deep dive into Step 1 of the new revenue recognition model

5
Anonymous Author
Very very helpful course on the new rev recognition standard!

5
Member's Profile
This course is very well explained and easy to understand.

5
Anonymous Author
Great dive into step 1of new revenue recognition guidance.

4
Member's Profile
Great course. Thanks, I don't have anything to comment on.

5
Member's Profile
Very well laid out. Lots of examples to solidify points

5
Member's Profile
this course was very informative. great use of examples

4
Member's Profile
great, everyone should take it from controllers to CFO

5
Member's Profile
Good instruction, good examples. Character limits.

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 .
Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction to Revenue Rec: Considerations for Identifying the Contract – Part 1 3:33
  What is Revenue4:09
  Contrast With Previous Standards11:15
  Identifying The Contract8:17
  Step One: Contract Criteria3:49
  Approval and Commitment15:41
  Identifiable Terms4:24
  Commercial Substance2:52
  Collection Probability14:51
CONTINUOUS PLAY
  Revenue Rec: Considerations for Identifying the Contract – Part 1 1:08:51
SUPPORTING MATERIALS
  Slides: Considerations for Identifying the Contract – Part 1 PDF
  Revenue Rec: Considerations for Identifying the Contract – Part 1 Glossary/IndexPDF
REVIEW AND TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam