Revenue Recognition - Topic 606 Overview
Author: Lynn Fountain
| CPE Credit: |
2 hours for CPAs |
On May 28, 2014, the FASB completed its Revenue Recognition project. It issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance establishes principles to report useful information to users of financial statements about the nature, timing, and uncertainty of revenue from contracts with customers.
The standard affects all entities (public, private, and not-for-profit) that have contracts with customers. Exclusions include:
- Leases accounted for under FASB ASC 840, Leases;
- Insurance contracts accounted for under FASB ASC 944, Financial Services—Insurance;
- Most financial instruments, and guarantees (other than product or service warranties).
Transaction and industry specific revenue recognition guidance is eliminated. It is replaced with a principle based approach for determining revenue recognition. The new standard requires significantly more disclosure than previous GAAP.
Publication Date: August 2025
Designed For
Who should attend (optional) Controllers, Accountants, Auditors, Finance and Operational Professionals Professionals
Topics Covered
- The Need
- Five Step Model
- Issues Since Standard Implementation
- Updated Disclosure Rules
- Practial Expedient
- Accounting Policies
- Industry Impact
Learning Objectives
- Explain the need for the new standard
- Identify the new revenue recognition core principles and the five-step revenue model
- Identify the impact of the new standard on various revenue concepts
- State issues identified since the standard was implemented
- Identify the impact of the standard on various industries
- Identify required disclosures for the new standard
Level
Update
Instructional Method
Self-Study
NASBA Field of Study
Accounting (2 hours)
Program Prerequisites
Basic understanding of Revenue Recognition
Advance Preparation
None
