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COVID-19 and its related impact on the economic environment have raised numerous questions that affect almost each step of the updated standard. Those that have already implemented ASC 606 may need to review the terms of their contracts and adjust as necessary. Companies must recognize the impact and execute appropriate considerations within each step. The pandemic could affect various aspects embedded within each step of an entity's revenue recognition process. It is critical to note the potential significant impact that the COVID-19 crisis has brought to aspects of the revenue standard. Some impacts within the various steps include:

  • Step 1: Identify the contract with a customer
    • Contract enforceability
    • Collectability
    • Contract modifications and combinations
  • Step 2: Identify performance obligations
    • Material rights
  • Step 3: Determine the transaction price
    • Price concessions and other variable considerations
    • Significant financing component
    • Other extended payment terms
  • Step 4: Allocate the transaction price
    • Changes impacting standalone selling prices
  • Step 5: Recognize Revenue
    • Revenue recognized overtime
    • Impairment of receivables and contract assets
    • Contract costs
    • Disclosures

On May 28, 2014, the FASB completed its Revenue Recognition (RR) project issuing ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Guidance establishes principles to report information about the nature, timing, and uncertainty of revenue from contracts with customers. The standard affects all entities that have contracts with customers with some exclusions. This session will discuss basic concepts around each step of the revenue model and also implications that COVID-19 have surfaced.

Learning Objectives

  • Explore and overview the current economic environment and the impact of COVID-19 on the revenue recognition standard.
  • Discover and overview the standard’s five step model.
  • Explore and examine Step One: Identify the Contract
  • • Evaluate impact of COVID-19 on Step One.
  • Explore and examine Step Two: Determine Performance Obligations
  • • Evaluate impact of COVID-19 on Step Two
  • Explore and examine Step Three: Determine the Transaction Price
  • • Evaluate impact of COVID-19 on Step Three
  • Explore and examine Step Four: Allocate the Transaction Price to Performance Obligations
  • • Evaluate impact of COVID-19 on Step Four
  • Explore and examine Step Five: Recognize Revenue
  • • Evaluate the impact of COVID-19 on Step Five
  • Identify and evaluate scenarios related to COVID-19
Last updated/reviewed: November 8, 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

4 Reviews (10 ratings)Reviews

4
Member's Profile
Very informative, course, buy too much repetitions from the Revenue recognition course. Would have preferred more of the COVID19 impact discussion with more examples.
5
Anonymous Author
This course provides very relevant and interesting information on the new revenue recognition standard and the impact of Covid on this new standard.
4
Member's Profile
Very nice information to get you to think about COVID considerations. No course will be able to cover all scenarios.
5
Member's Profile
Great topic. Timely and informative. Useful information given the current state of the economy.

Prerequisites

Course Complexity: Intermediate

No advanced preparation or prerequisites are required for this course.

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 .
Course Syllabus
INTRODUCTION AND OVERVIEW
  6:40Introduction to COVID Impact on Revenue Recognition Standard
  8:01Overview COVID-19 Impact
Five Step Model
  10:46Five Step Model
  10:05Step One: COVID 19 Challenges
  5:44Other Considerations
  10:20Step Two: Performance Obligations
  6:39COVID-19 Implications to Performance Obligations
  4:19Step Three: Transaction Price
  10:35COVID Implications on Step Three
  3:58Step Four: Allocate and COVID Implications
  4:56Step Five: Recognize Revenue
CONCLUSION
  2:39Disclosures
  1:24Summary
CONTINUOUS PLAY
  1:26:06COVID Impact on Revenue Recognition Standard
SUPPORTING MATERIAL
  PDFSlides: Revenue Recognition COVID Implications
  PDFRevenue Recognition COVID Implications Glossary/ Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM