ASC 606 Revenue Recognition: Considerations for Identifying the Contract Part 2 (Completed)

This course is a continuation of the discussion of Step One in the (ASC 606) revenue recognition process: Identifying the Contract. Specifically, this session delves further into the considerations surrounding contract modifications, change orders, unpriced change orders, cancellations, non-finalized changes and accounting treatment when a contract does not exist. On May 28, 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued converged guidance on recognizing revenue in contracts with customers. The objective of the guidance is to establish principles to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue from contracts with customers. The new guidance provides several benefits to financial statement users. Entities applying the new standard for contract revenue recognition will follow five steps: • 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 The course utilizes many examples from numerous industries to enhance learning of the various concepts.

Who Should Attend
Revenue professionals, CFOs, CEOs, controllers, operational professionals, legal professionals, audit and internal audit professionals

Topics Covered

• Contract modification status
• Considerations for contract modifications
• Methods to account for unpriced change orders
• Modifications that fall under the cumulative catch-up accounting rules
• Accounting for non-finalized contract changes
• Accounting for contract cancellations
• Accounting treatment when it is determined a contract does not exist
• Concept of contract combinations

Learning Objectives

• Examine the components and requirements around contract modifications
• Identify methods to determine contract modification status
• Describe accounting considerations for contract modifications
• Identify methods to account for unpriced change orders
• Recognize modifications that fall under the cumulative catch-up accounting rules
• Describe accounting for non-finalized contract changes
• Describe accounting for contract cancellations
• Identify accounting treatment when it is determined a contract does not exist.
• Recognize the concept of contract combinations

Level
Basic

Instructional Method
Group: Internet-based

NASBA Field of Study
Accounting (2 hours)

Program Prerequisites
None

Advance Preparation
None