
This is the second course in the ongoing series evaluating the (ASC 606) Revenue Recognition Standard. This course relates to step two of the standard “Considerations for Performance Obligations”. Part 1 evaluated the concept of distinct and non-distinct goods and services and how they related to performance obligations.
Properly identifying performance obligations is a critical step in the five-step revenue recognition model. It is a step that must be completed at the inception of the contract and prior to moving on to step three of the model. As discussed in segment one on performance obligations, there are many types and variations of obligations and as such, management will be required to utilize significant judgment when applying this step. However, it is important that the judgment be supported by considerations of the proper factors.
The course further evaluates areas that impact performance obligations. We utilize multiple examples from various industries to illustrate the considerations that must be evaluated in line with both identifying performance obligations and allocating the transaction price appropriately.
Learning Objectives
- Explore the concept of revenue recognition related to performance obligations that may involve components such as:
- Options to purchase additional goods/services
- Identifying material rights
- Shipping and handling charges
- Identify and examine factors impacting performance obligations including:
- Principal vs. agent status
- Warranties
- Options for additional goods and services
- Non-refundable up-front fees
- Stand-ready obligations
- Rights of returns
Included In Certifications
This course is included in the following Certification Programs:
16 CoursesRevenue Recognition Certification
- Revenue Recognition Standard Overview
- Revenue Recognition: Identify The Contract Part 1
- Revenue Recognition: Identify The Contract Part 2
- Revenue Recognition: Performance Obligations Part 1
- Revenue Recognition: Performance Obligations Part 2
- Revenue Recognition: Transaction Price Part 1
- Revenue Recognition: Transaction Price Part 2
- Revenue Recognition: Allocating Transaction Price
- Revenue Recognition: Recognize Revenue
- Revenue Recognition: Scenarios For Identify The Contract
- Revenue Recognition: Scenarios For Performance Obligations
- Revenue Recognition: Scenarios For Transaction Price
- Revenue Recognition: Scenarios For Transaction Price And Recognize Revenue
- Revenue Recognition: Case Scenarios Part 1
- Revenue Recognition: Case Scenarios Part 2
- Revenue Recognition COVID Implications
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Prerequisites
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.