What are some signs that control has been transferred from the seller to the buyer in a transaction under U.S. GAAP?
Under ASC 606, in order for a transaction to be complete, control of the goods has to pass from the seller to the buyer. The visual below outlines some indications that transfer of the goods is complete:
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Under ASC 606 (revenue recognition standard), what criteria must be in place for a valid contract to exist?
One of the key criteria in ASC 606 is that a valid contract has to be in place with a customer in order for there to be a valid transaction. The visual below outlines the key criteria that must exist:
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What are the five steps for revenue recognition under U.S. GAAP (ASC 606)?
There are 5 key steps or principles that are required for revenue to be recognized: Step 1: Identify the Contract with a Customer: A contract is a written or spoken agreement, generally concerning the sale of goods, employment terms, tenancy of property, and will be enforceable by law. Step 2: Identify the Performance Obligations in […]
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What types of consideration should be included in the purchase price in a transaction?
Under ASC 606, having a defined transaction price is one of the key steps in revenue recognition. The transaction price can include a variety of different types of consideration like cash, but also variable consideration, noncash consideration, financing components, and consideration payable to customer. The visual below details these items out: