Revenue Recognition Assistant
Based on ASC 606 / IFRS 15 Principles
Step 1: Identify the Contract
Does the arrangement meet the criteria of a contract under ASC 606 / IFRS 15?
Step 2: Identify Performance Obligations (POs) ? List distinct goods or services promised. A good/service is distinct if the customer can benefit from it alone or with readily available resources, AND it's separately identifiable from other promises in the contract.
Step 3: Determine the Transaction Price ? The amount of consideration the entity expects to be entitled to. Adjust for variable amounts, financing, non-cash considerations, etc. This tool uses the total price for allocation.
Consider potential adjustments (variable consideration, financing, etc.) when determining this amount. This tool allocates this total price.Step 4: Allocate Transaction Price to POs
Price is allocated based on relative Standalone Selling Prices (SSP). Ensure total SSP for all POs is entered in Step 2.
Allocation will be calculated once Transaction Price and POs with SSPs are entered.
Step 5: Recognize Revenue When/As POs Satisfied
Determine if control transfers over time or at a point in time for each PO.
Recognition options will appear once POs are added.
Summary
| Performance Obligation | Allocated Price ($) | Recognition Timing |
|---|---|---|
| Summary will populate as data is entered. | ||
| Total | 0.00 | |