A guide to revenue recognition

May 02, 2024
Revenue recognition Financial reporting Technical accounting Audit

A guide to revenue recognition assists middle-market companies in applying the revenue recognition model in Topic 606, “Revenue from Contracts with Customers,” of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC). ASC 606 provides a robust framework for recognizing revenue, and upon its effective date, replaced almost all pre-existing revenue recognition guidance, including industry-specific guidance, in U.S. generally accepted accounting principles (legacy GAAP).

Our comprehensive guide includes in-depth discussion and numerous examples on:

  • All the critical aspects of ASC 606, including its scope, five-step revenue recognition model, and presentation and disclosure requirements
  • The related guidance in:
    • ASC Subtopic 340-40, “Other Assets and Deferred Costs – Contracts with Customers"
    • ASC Subtopic 610-20, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets”
  • Commonly asked questions that arise in practice
  • Significant differences between the new guidance and legacy GAAP

For a condensed discussion of the important concepts in ASC 606, refer to the executive summary in Chapter 1 of the guide. The May 2024 edition of the guide has been updated to address various issues encountered in practice. A summary of the significant changes made in the May 2024 edition can be found in Appendix F of the guide.

Technical accounting guides

We have prepared in-depth guides on several particularly complex and challenging accounting topics, with comprehensive discussion of the applicable U.S. GAAP and many examples.

Subscribe to Financial Reporting Insights

Stay informed with our biweekly resource for recent financial reporting developments, including AICPA, SEC, PCAOB matters and other finance and accounting compliance considerations.