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 | |
The Revenue Recognition Assistant is a free online tool designed to help businesses, accountants, and financial professionals accurately determine when and how to recognize revenue. Proper revenue recognition is critical for compliance with accounting standards such as IFRS 15 and ASC 606, ensuring your financial statements are transparent and reliable.
This tool simplifies the complex process of matching revenue with the period in which it is earned, not just when payment is received. Whether you operate a subscription-based service, sell products with delivery timelines, or provide long-term contracts, the Revenue Recognition Assistant can help you stay compliant and consistent.
To use the tool, input key details such as contract value, payment terms, delivery schedules, and performance obligations. The assistant calculates the portion of revenue that should be recognized within each reporting period, making it easier to prepare accurate financial reports.
Key Benefits:
Compliance – Adhere to global accounting standards with accurate calculations.
Clarity – Understand exactly how much revenue to report in each period.
Efficiency – Save time compared to manual spreadsheet calculations.
Versatility – Suitable for service businesses, product sales, and multi-phase projects.
By using the Revenue Recognition Assistant, you can avoid common reporting errors, improve audit readiness, and provide stakeholders with clear, trustworthy financial data. The tool is especially valuable for startups scaling their operations, SaaS companies with recurring billing, and enterprises with complex contracts.
Our tool is free, works in any browser, and requires no signup. Start using the Revenue Recognition Assistant today to streamline your accounting process, maintain compliance, and make informed financial decisions.