Instructor for this course
more

Entities applying the new Accounting Standards Codification (ASC) Topic 606: Revenue from Contracts with Customers must follow five steps to revenue recognition:

  • 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

This course briefly outlines each of the five steps and then works through various exercises and scenarios covering each of the steps. 

The course is a second practice case study course for the new five-step revenue recognition model.  It utilizes separate examples from numerous industries to enhance learning of the various concepts.

Learning Objectives

  • Explore step one “Identify the Contract”
    • Identify solutions to exercises for step one.
  • Explore step two “Performance Obligations”
    • Identify solutions to exercises for step two.
  • Explore step three “Determine the Transaction Price”
    • Identify solutions to exercises for step three.
  • Explore step four “Allocate the Transaction Price”
    • Identify solutions to exercises for step four
  • Explore step five “Recognize Revenue”
    • Identify solutions to exercises for step five.
Last updated/reviewed: November 16, 2020

Included In Certifications

This course is included in the following Certification Programs:

16 CoursesRevenue Recognition Certification

  1. Revenue Recognition Standard Overview
  2. Revenue Recognition: Identify The Contract Part 1
  3. Revenue Recognition: Identify The Contract Part 2
  4. Revenue Recognition: Performance Obligations Part 1
  5. Revenue Recognition: Performance Obligations Part 2
  6. Revenue Recognition: Transaction Price Part 1
  7. Revenue Recognition: Transaction Price Part 2
  8. Revenue Recognition: Allocating Transaction Price
  9. Revenue Recognition: Recognize Revenue
  10. Revenue Recognition: Scenarios For Identify The Contract
  11. Revenue Recognition: Scenarios For Performance Obligations
  12. Revenue Recognition: Scenarios For Transaction Price
  13. Revenue Recognition: Scenarios For Transaction Price And Recognize Revenue
  14. Revenue Recognition: Case Scenarios Part 1
  15. Revenue Recognition: Case Scenarios Part 2
  16. Revenue Recognition COVID Implications

21 Reviews (113 ratings)Reviews

4
Anonymous Author
The interesting examples here illustrated the steps to revenue recognition,which will benefit to my work practice。I will practice more questions after finished the course. Thanks for MS. Lynn great work.
5
Member's Profile
Again, this is one of my favorite instructors on Illumeo! I love all of her courses. I finished part 1 of this series and am very happy to have more practice by finishing part 2!
4
Member's Profile
Good course to solidify the knowledge of the new guidance. I wish it would have included more cases instead of the repetition of the information from prior courses.
4
Member's Profile
The different perspective on the health club example emphasizing transaction price in this course is helpful to ensure we're really assimilating the information.
5
Anonymous Author
Excellent course with many great examples of how to practice the revenue recognition guidance. Well-presented, organized and moves at a good pace. Thanks!
5
Anonymous Author
Excellent recap of the 5 steps of RR and solid examples of their application to learn from. Recommend this course to solidify understanding of concepts.
5
Anonymous Author
Another excellent course by Ms. Fountain on revenue recognition. This should be a required course to have a complete understanding of Topic 606.
5
Anonymous Author
This course was very informative, and the examples were tough but essential in helping me to learn the fundamentals of this material.
5
Member's Profile
Excellent course material and examples. The videos were very informative and educational. I really enjoyed reviewing the material.
5
Anonymous Author
This is a very interesting course on new revenue recognition standard with many good examples on how to apply the new standard
5
Anonymous Author
The case studies really help to see the topic applied. This course is very well prepared to show how to apply each step.
4
Member's Profile
This was a good course.. really helped to to the case studies and bring the concepts to light
5
Anonymous Author
Easy to follow slides and videos. Thanks for another valuable course in revenue recognition!
4
Anonymous Author
Very nice course summarizing the entire Revenue Recognition topic with good examples
5
Member's Profile
Another great course with good examples provided. Thorough explanations.
5
Member's Profile
Case studies are very helpful for practical application of the standard.
3
Anonymous Author
would have loved more examples especially on how fair value assessment.
4
Anonymous Author
Good and detailed course. Excellent examples with simple explanations.
5
Anonymous Author
Good revenue recognition scenario, well structured and presented.
5
Anonymous Author
This course provided a good overview of Revenue Recognition.
3
Anonymous Author
Good exercises and broad coverage of the 5 step model

Prerequisites

Course Complexity: Intermediate

The course is a second practice case study course for the new five-step revenue recognition model.  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

Hi professor, for exercise 2 (On Jan 1, entity enters a contract to provide monthly computer support for 3 yrs. to a customer - price $400K.), since we've performed $240k of support as of Dec 31 Yr2, and we did receive $200k, why would we recognize $0 instead of $80k of revenue, the portion that wouldn't affect by the client's cash flow issue??

Member's Profile

I need to review this one further but wanted to give an initial reply. The question somehow hit my spam so I am just now seeing it.

I will review and verify but to my recollection, in this circumstance if we have concerns with collectibility of the contract amount, the standard says you should record amounts received as a liability until the collection issue is resolved.

I will look at this tonight further. Thanks fir the question

Member's Profile

I looked at this further. You have to consider the assumptions in the next slide. Remember, you have to consider whether the discount is implicit and whether there is a potential there could be a significant reversal of revenue. Since the customer is now having financial problems, this becomes a consideration. If you follow through to the third slide it explains that you have to consider the implicit discount so the price is actually 90% of $400K = $360k. We indicated the vendor does not have to reverse revenue already recognized not once they know the company is having financially issues the component of significant reversal comes in. That slide describes what you do in each year. You might re-listen and let me know if this makes sense. It all has to do with the assumptions

Course Syllabus
INTRODUCTION AND OVERVIEW
  4:55Introduction to Revenue Rec: Case Scenarios for 5 Step Revenue Recognition Process – Part 2
  4:24Five Step Model
  11:19Step One: Identify the Contract
  9:45Contract Modifications
  10:04Exercise One: Identify the Contract
  10:35Exercise Two: Identify the Contract Collectability
  9:24Exercise Three: Contract Modifications
  7:43Step Two: Performance Obligations
  8:48Exercise: Performance Obligations
  12:02Exercise: Performance Obligations with Material Right
  4:49Engineco Exercise
  10:44Step Three & Four
  15:55Exercise: Transaction Price and Allocate
  5:39Step Five: Recognize Revenue
CONTINUOUS PLAY
  2:06:07Revenue Rec: Case Scenarios for 5 Step Revenue Recognition Process – Part 2
SUPPORTING MATERIALS
  PDFSlides: Revenue Rec: Case Scenarios for 5 Step Revenue Recognition Process – Part 2
  PDFRevenue Rec: Case Scenarios for 5 Step Revenue Recognition Process – Part 2 Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM