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This course is meant to complement the course that evaluates all aspects of the five steps to revenue recognition (ASC 606).  The course “Complying with the Revenue Recognition Standard” examines the five-step model outlined in the standard that organizations must utilize when recognizing revenue. The new revenue recognition standard applies to all companies.

This course delves into step two of the revenue recognition process relating to performance obligations. Identifying performance obligations requires having a detailed understanding of the contract, deliverables, promises and contract timing.  It involves being able to distinguish between distinct and non-distinct goods and services to identify whether one or more performance obligations exist.  This task involves significant judgment and requires specific considerations be applied to properly identify the performance obligations. 

Other aspects relating to performance obligations that will be discussed within this segment are the concepts of measuring progress over a period of time and identifying how to recognize revenue over a period of time.  This segment also evaluates how to recognize revenue related to intellectual property.

This course is the first of two that evaluate performance obligations.  Part two will examine elements surrounding factors that impact performance obligations and examining how to handle up-front fees or stand-alone offers.

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

Learning Objectives

  • Explore requirements behind step two of the revenue recognition standard “performance obligations”.
  • Recognize the differences between distinct and non-distinct goods/services.
  • Examine examples of both distinct and non-distinct goods/services.
  • Identify how to measure progress over a period of time.
  • Identify how to recognize revenue over a period of time.
  • Explore the processes used for intellectual property.
Last updated/reviewed: November 18, 2019

Included In Certifications

This course is included in the following Certification Programs:

15 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

44 Reviews (183 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.
4
Member's Profile
The examples are very helpful but there may be better examples for some of these concepts. The example with the customer who buys the lumber for the floor and also the labor is a little unclear. Is that customer buying them from different vendors or the same? This makes all the difference. And I’m left unclear.
5
Member's Profile
YOU NEED TO TAKE THIS COURSE. If you are in any construction related industry, you need to take this course and the series. Don't be surprised at audit time and have revenue deferred. Learn the information yourself and be sure of what you are doing.
5
Anonymous Author
This course is great insight into a complex topic that can be overlooked. The instructor did a great job at providing grey examples that are different from the normal black and white training examples. Great training.
5
Member's Profile
This course on the considerations for performance obligations is a good overview. It provides a number of examples to help explain the concepts. It also includes quizzes to help practice the concepts.
4
Anonymous Author
This on-demand training fulfilled its obligations. It covered what a performance obligation was. It was easy to understand the material and then be able to apply it to real life situations.
3
Anonymous Author
Good summary of different types of performance obligations, including numerous examples of the differences between a single objective or identification of multiple objectives
5
Member's Profile
This is a great course. I really learnt a lot from this informative and in-dept material. I would recommend it to anyone wanting to learn more about this topic.
4
Member's Profile
The audio wasn't not very clear, I had to turn up my speaker very high. I like the knowledge review test and this was consistent throughout the webinar.
5
Member's Profile
Great course on the second of five steps of revenue recognition. Lynn provides great examples with clear explanations. I highly recommend this class.
5
Anonymous Author
This course was a really great high level introduction to performance obligations under the new standard - Would definitely recommend to others.
5
Member's Profile
This course on obligations was very complete. More example would have been helpful to fully clarify the nature or contract obligation.
4
Anonymous Author
Well taught course, although the material (and the new standard) is quite confusing. The slides are good references for the future.
4
Anonymous Author
This is easy to follow along, same as the other courses. One suggestion would be to update the examples that use Sears.
5
Member's Profile
Good material within the course. Examples included in the course really help reinforce understanding of the concepts.
4
Anonymous Author
Thus course was very informative and adequately summarizes the key considerations for applying this standard.
4
Member's Profile
Good Overview of Topic 606 Revenue Recognition's new standard - Considerations for Performance Obligations
5
Anonymous Author
This is an excellent, detailed and easy to follow course and I plan to take all of them in the series.
5
Member's Profile
A very informative and detailed course. Liked all the examples evaluated in comparisons between them.
4
Anonymous Author
It would be better to illustrate more examples to explain the theory. Thanks for Ms Lynn' great work!
4
Anonymous Author
this course was really helpful in gaining a better understanding of performance obligations per 606
5
Anonymous Author
What you would expect for a foundation level course. The questions proved to be a nice refresher.
5
Anonymous Author
The examples were very helpful and allowed me to get a firm grasp of the material. Thank you!
4
Member's Profile
Everyone from controller, CFO and financial reporting professionals should take this course.
5
Member's Profile
Relevant examples and detailed explanations. Really helpful for refreshing on rev rec.
5
Anonymous Author
Very nicely explained concepts and appropriate examples. Easily understood the topic
4
Member's Profile
Good overview of an important change affecting the accounting profession. Thanks!
5
Anonymous Author
this is a great way to explain the subject. examples used were easy to understand.
5
Member's Profile
comprehensive easy to understand the rules for asc 606 performance obligations
5
Member's Profile
I'm completing all of Ms. Fountain's courses! Her 606 lessons are so helpful.
5
Member's Profile
Good overview of these new standards with practical examples. Thank you.
5
Member's Profile
The course provides many examples to help you understand the material.
5
Member's Profile
A lot of good detail on performance obligations with lots of examples.
5
Member's Profile
Good overview of the new revenue standard for pefromance obligations.
5
Anonymous Author
Quick and easy course with easy to follow slides. Great instructor.
5
Member's Profile
This is great course, good slides and examples. Highly recommend.
4
Member's Profile
Good explanation and examples for the input and output methods
4
Anonymous Author
Simple and easy course to understand the basic concept of PO
4
Anonymous Author
This course provided a good overview of revenue recognition.
5
Anonymous Author
The presenter aptly describes this complex topic very well.
5
Anonymous Author
Great course. Gives lots of detail on a difficult concept.
5
Anonymous Author
The variety of examples used in this course are helpful.
3
Member's Profile
It would be great if we could cover more for SaaS product
5
Anonymous Author
Thanks for the thorough one hour course! Very helpful.

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 .

2 QuestionsCourse Questions and Answers

User picture

Hi! I'm wondering about treating software customization as non-distinct. I believe software customization is often handled by contractors/3rd parties, so if the company chooses to engage the original software company to do the customization, I would think that could be treated as distinct. Can you clarify a bit more? Thanks!

Member's Profile

Many software company’s develop proprietary software where they are the only ones available to properly install the software. In that case the installation is non-distinct because they are the only vendor that can do it. If the software can be installed by a separate vendor but the customer still chooses the maker of the software then it is distinct. You may want to check out the separate course I had that specifically talks about revenue recognition for software avengers

Course Syllabus
INTRODUCTION AND OVERVIEW
  2:15Introduction to Revenue Rec: Considerations for Performance Obligations Part 1
  8:46Performance Obligation
Performance Obligations
  7:37Distinct Goods/Services
  11:17Example of Distinct Services
  11:25Non-Distinct
  2:20Determination of Distinct vs. Non-Distinct
  3:10Revenue Recognition Over a Period of Time
  4:56Measuring Progress Towards Completion
  3:54Activities That Do Not Transfer Goods/Services
  6:06Test Your Knowledge
CONCLUSION
  1:29Summary
CONTINUOUS PLAY
  1:03:16Revenue Rec: Considerations for Performance Obligations Part 1
SUPPORTING MATERIALS
  PDFSlides: Revenue Rec: Considerations for Performance Obligations Part 1
  PDFRevenue Rec: Considerations for Performance Obligations Part 1 Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM