1.5 CPE 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: August 23, 2023
Included In Certifications
This course is included in the following Certification Programs:
17 CoursesRevenue Recognition Certification
- Revenue Recognition (ASC Topic 606) Standard Overview
- Revenue Recognition (ASC Topic 606): Identify The Contract Part 1
- Revenue Recognition (ASC Topic 606): Identify The Contract Part 2
- Revenue Recognition (ASC Topic 606): Performance Obligations Part 1
- Revenue Recognition (ASC Topic 606): Performance Obligations Part 2
- Revenue Recognition (ASC Topic 606): Transaction Price Part 1
- Revenue Recognition (ASC Topic 606): Transaction Price Part 2
- Revenue Recognition (ASC Topic 606): Allocating Transaction Price
- Revenue Recognition (ASC Topic 606): Recognize Revenue
- Revenue Recognition (ASC Topic 606): Scenarios For Identify The Contract
- Revenue Recognition (ASC Topic 606): Scenarios For Performance Obligations
- Revenue Recognition (ASC Topic 606): Scenarios For Transaction Price
- Revenue Recognition (ASC Topic 606): Scenarios For Transaction Price And Recognize Revenue
- Revenue Recognition (ASC Topic 606): Case Scenarios Part 1
- Revenue Recognition (ASC Topic 606): Case Scenarios Part 2
- Revenue Recognition (ASC Topic 606) COVID Implications
- Revenue Recognition (ASC Topic 606): Disclosure Requirements “Contracts with Customers”
57 Reviews (258 ratings)
Reviews
Anonymous
(Vice President of Technical Accounting)
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.
Lawrence Hirsch
(Controller at Builders design)
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
Anonymous
(cpa)
A very thorough instructor for this extensive standard. Ms. Fountain does an excellent job dissecting intricacies of the standard as written by FASB. While audio is a bit monotonous, but the PP slides are excellent in supporting her narrative. Do use them along with the audio stream and separately!
Anonymous
(Sr. Director of Cost Management and Comp..)
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.
Anonymous
(Revenue Operations Analyst)
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.
Anonymous
(Risk manager)
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.
NITHEESH HG
(Senior revenue Analyst at VMware Software India Private Limited)
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
Anonymous
(-)
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.
Joshua Bourquard
(Accounting Manager Financial Reporting a.. at TPx Communications)
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.
Linda Forde
(Owner at The Forde Firm, LLC)
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!
Julia Krikunova
(VP, Finance at Taborda Solutions)
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!
Anonymous
(Director of Accounting)
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.
Anonymous
(CPA)
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.
Zena Arbitrario
(Revenue Accountant at Docusign)
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.
Jay Bineau
( at Seigler & Tweedlie)
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.
Derek Ettinger
( at GP Fund Solutions, LLC)
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.
Anonymous
(Assistant Controller)
Good course! This course improves my knowledge of the transaction price. The examples with journal entries really helps me understand the concepts!
Anonymous
(Controller)
Excellent description of the proper handling of the specific situations affecting transaction price determination. Great use of examples.
Anonymous
(VP of Accounting)
Good way to know the different kinds of transaction price examples such as the right of return, significant financing, royalties.
Lilian Dendrinos
(consultant at DLC Group)
I highly recommend this course to anyone working in accounting. The class material is filled with lots of examples. Great class.
Anonymous
(Consultant)
was shocked the usage based and sales based royalties dont seem to be all that different in recognition other than the measurement
Anonymous
(Executive Director, Corporate Controller)
This course provides a good high level summary of determination of transaction price with good examples to help the understanding.
Anonymous
(Financial Analyst)
This course seems like the most important yet. Although complex it will be key to learn and understand to grasp the new standard.
Dowton Martin
(Accounting and Finance Consultant at DLC Inc)
Great course and material. It was very informative and the examples were excellent. My knowledge has significantly increased.
Anonymous
(Inventory Accounting Manager)
There was a lot of great information and it really made you think about the transaction price and what is considered revenue.
Anonymous
()
This series of revenue recognition courses is excellent and I highly recommend it to those who are interested in the subject.
Anonymous
(Accounting Manager)
The course is a continuation of the 606 Revrec standard. The course is detailed and contains examples that are relevant.
Anonymous
(Director of Finance)
This course was harder to follow than other courses in the series. The examples were missing some key information.
Anonymous
()
I explored how rights of return impact
transaction price and identified how refund liabilities should
be handled.
Inna Shmukler
(Controller at Fornetix LLC)
Overall a very informative course. It would have been helpful to show calculations for certain amounts presented.
Anonymous
(Revenue Accountant)
This was an unfamiliar portion of 606 and this course clarified many concepts. The examples were very helpful.
Anonymous
()
Course was a good continuation of Transaction price part 1, with clear examples to really explain the concepts.
Karis Davis
(Finance Director at Belden)
Overall, good course. There were plenty of examples to help conceptualize some of the more complex guidelines.
Anonymous
(Self)
This takes a very complicated set of topics and breaks them down into a much easier to understand discussion.
Anonymous
(NA)
Very well explained concepts and easy to understand examples making it an interesting topic to understand.
Anonymous
(Sys Ops Manager)
Again a very helpful course to understand one of the more difficult areas related to the ASC 606 guidance.
Anonymous
(Revenue Accountant)
Another relevant course designed to educate finance and accounting professionals on ASC 606. Thank you!
Victor Fuentes
(Manager at RSM)
another great course on revenue recognition. A must for everyone in financial reporting and accounting
Anonymous
(Consultant)
Useful course for those who work with revenue and all accounting professionals in general.
Megan Randa
(Senior Staff Accountant at OneLive LLC)
Goes in-depth and provides helpful examples to help solidify understanding of the guidance
Anonymous
()
I liked that some of the examples included actual journal entries instead of just theory.
Anonymous
()
The instructor gives a lot of good examples to better illustrate the abstract concepts.
Joe Defelice
(Consultant at Kranz & Associates)
Overall good
Anonymous
(Director)
Very important topic that is useful for many different companies as 606 is important.
Abraham Minto
( at Abraham Minto LLC)
Lynn's course on Determining the Transaction Price for ASC 606 was well prepared
Anonymous
(Sr. Accountant)
Lynn makes the material so easy to learn, with all of her excellent examples!
Anonymous
(CFO)
Pretty good review for level of course. Feel like could have more detail.
Chris Grimes
(Rules Master at Cisco)
Good overview of the effects on transaction price under the new standard.
Sergiy Korytko
(Revenue Manager at Instacart)
Good overview of the effects on transaction price under the new standard.
Anonymous
()
This course was well organized and easy to understand. I recommend it.
Anonymous
()
Great course for learning in new area. Well structured and presented.
Anonymous
(Accountant)
This topic was very well explained. Understood the concepts clearly.
Anonymous
(Accounting Bookkeeper)
Presentation was good and understandable with the examples used.
Anonymous
(Lead Revenue accountant)
More new examples could be used to help understand the topic.
Anonymous
(Senior Accountant)
excellent info and examples that help apply the concepts
Anonymous
(accountant)
The materials are well organized with great examples.
Lindsey Tookey
(Director of Financial Accounting at Instacart)
It was accurate and provided some useful examples.
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
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Course Questions and Answers(3 Questions)
Lynn FountainCPA, CGMA, CRMA, MBA, Consultant, Author, Trainer
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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!
Wanted you to know I saw your question. I am currently traveling and will be able to look at slides tomorrow
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.