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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. 

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.

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: May 17, 2022

Included In Certifications

This course is included in the following Certification Programs:

16 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

44 Reviews (204 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.
5
Member's Profile
More ASC606 here in this part 2 of the topic. Lynn, thank you for giving this series of courses concerning ASC606. There is a lot more to 606 than just "revenue recognition" that I was not aware of. You have laid it all out for ease of comprehension and hit all the points of interest in the content. Thank you, Larry
4
Anonymous Author
Very good description of the many unique sales transaction variables that impact revenue recognition. Although these variables do not affect all business and industries, those that are impacted are impacted significantly. This course does a good job highlighting those impacts.
5
Anonymous Author
This course really held my attention. The examples are on point and really hammer home the point. I also really enjoy the slides and terms resources. The instructor explains the material well but the supporting materials help to make following along much easier.
4
Anonymous Author
the course gave me an picture of how to account for the different situations in revenue recognition, but the examples were so similar so I am still a little confused. Maybe I should go over the course for several times. Thanks again for Ms Lynn's great work.
5
Member's Profile
This course is really helpful for revenue accounting professionals which briefs the five steps approach using examples and it’s very easy to understand. Major call outs are explained briefly along with comparison with ASC605
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.
4
Member's Profile
Good overall discussion on the topic of revenue recognition and in depths knowledge of TRansaction Price consideration but not enough journal examples and real life applications but overall good class.
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!
4
Member's Profile
This course specifically helped me with a live situation at work, where client pays over the next few years after they obtain control of a product. Good example on implied financing component!
5
Anonymous Author
This is another important course to get an understanding on Topic 606 and Ms. Fountain provides very good examples in being able to apply the new revenue recognition standard.
5
Anonymous Author
Another solid course in the revenue recognition series related to the proper determination of transaction price. Looking forward to taking the next course in this series.
3
Member's Profile
I would like the option of video playback speed, akin to speed reading, I prefer to listen to presenters quicker than the normal speed and would find it easier to learn.
5
Member's Profile
This course was more direct. the exam was a bit too simple though since it test the practical but not some of the detailed problems of revenue recognition.
5
Member's Profile
I found this to be one of the more difficult courses in the revenue recognition series. Lynn did a good job of providing examples to help reinforce concepts.
5
Anonymous Author
Good course! This course improves my knowledge of the transaction price. The examples with journal entries really helps me understand the concepts!
5
Anonymous Author
Excellent description of the proper handling of the specific situations affecting transaction price determination. Great use of examples.
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.
4
Anonymous Author
was shocked the usage based and sales based royalties dont seem to be all that different in recognition other than the measurement
5
Anonymous Author
This course provides a good high level summary of determination of transaction price with good examples to help the understanding.
2
Anonymous Author
This course seems like the most important yet. Although complex it will be key to learn and understand to grasp the new standard.
5
Member's Profile
Great course and material. It was very informative and the examples were excellent. My knowledge has significantly increased.
5
Anonymous Author
There was a lot of great information and it really made you think about the transaction price and what is considered revenue.
5
Anonymous Author
This series of revenue recognition courses is excellent and I highly recommend it to those who are interested in the subject.
3
Anonymous Author
This course was harder to follow than other courses in the series. The examples were missing some key information.
5
Member's Profile
Overall a very informative course. It would have been helpful to show calculations for certain amounts presented.
5
Anonymous Author
This was an unfamiliar portion of 606 and this course clarified many concepts. The examples were very helpful.
5
Anonymous Author
Course was a good continuation of Transaction price part 1, with clear examples to really explain the concepts.
4
Anonymous Author
This takes a very complicated set of topics and breaks them down into a much easier to understand discussion.
4
Anonymous Author
Very well explained concepts and easy to understand examples making it an interesting topic to understand.
4
Anonymous Author
Again a very helpful course to understand one of the more difficult areas related to the ASC 606 guidance.
5
Anonymous Author
Another relevant course designed to educate finance and accounting professionals on ASC 606. Thank you!
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.
4
Member's Profile
Overall good
5
Anonymous Author
Very important topic that is useful for many different companies as 606 is important.
5
Anonymous Author
Lynn makes the material so easy to learn, with all of her excellent examples!
4
Anonymous Author
Pretty good review for level of course. Feel like could have more detail.
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.
5
Anonymous Author
Great course for learning in new area. Well structured and presented.
4
Anonymous Author
This topic was very well explained. Understood the concepts clearly.
5
Anonymous Author
More new examples could be used to help understand the topic.
5
Anonymous Author
excellent info and examples that help apply the concepts

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 .

3 QuestionsCourse Questions and Answers

User picture

On your slide page 20 (PDF file), the journal entry #2, may I know why the ROR Asset is $10 instead of $5 (2 x $2.5) and the COGS is $40 instead of $45 (18 x $2.5)? Thank you!

Member's Profile

Wanted you to know I saw your question. I am currently traveling and will be able to look at slides tomorrow

Member's Profile

Remember, the ROR asset is not valued cost. It is valued at the selling price. The problem said there were 10% potent; returns. Sales were $100 so ROR asset is $10. You also have to credit inventory for the full $2.50 * 20 ($50) because the item has been taken out of inventory and sold. You recorded the potential refund liability in entry 1.

Course Syllabus
INTRODUCTION AND OVERVIEW
  2:18Introduction 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
  55:55Revenue Rec: Determine the transaction price Part 2
SUPPORTING MATERIALS
  PDFSlides: Revenue Rec: Determine the transaction price Part 2
  PDFAppendix – Transaction Price in a Contract
  PDFAppendix – Significant Financing Component
  PDFRevenue Rec: Determine the transaction price Part 2 Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM