In 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) to provide a robust framework and comprehensive principles for addressing revenue recognition issues. Additionally, the guidance on accounting for certain costs related to a contract with a customer in the scope of Topic 606 was codified in ASC 340-40, Other Assets and Deferred Costs – Contracts with Customers.
This white paper, Revenue recognition for business and professional services, highlights aspects of the guidance that are particularly pertinent for entities in the business and professional services industry, including:
- Accounting for contract modifications
- Identifying the units of account
- Accounting for incentive payments
- Determining whether revenue should be recognized over time or at a point in time
- Recognizing revenue as a principal or an agent
For additional information about all of the revenue recognition guidance, including those aspects discussed in this white paper, as well as numerous examples illustrating how to apply the guidance, refer to our publication, A guide to revenue recognition.