A guide to revenue recognition assists middle-market companies in applying the new 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 important aspects of ASC 606, including its scope, five-step revenue recognition model, and presentation, disclosure, effective date and transition requirements
- The related new 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 to help in understanding how revenue recognition has changed
For a condensed discussion of the important concepts in ASC 606, refer to the executive summary in Chapter 1 of the guide. The October 2022 edition of the guide has been substantially updated to incorporate recent FASB guidance and address various issues encountered in practice. A summary of the significant changes made in the October 2022 edition can be found in Appendix F of the guide.
