Wiley GAAP 2020

37 ASC 605 REVENUE RECOGNITION¹

• Revenue Recognition—General Principles
  • Technical Alert
    • ASU 2014-09, Revenue from Contracts with Customers (Topic 606).
    • ASU 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting.
    • ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.
  • Subtopics
    • Revenue Recognition Concerns.
    • Revenue Recognition—General Guidelines.
  • Issues in Revenue Recognition
    • Barter Transactions.
    • Mischaracterization of Unusual Transactions as Components of Gross Revenue.
    • Mischaracterizing Transactions as Involving Arm’s-length, Third Parties, thus Justifying Unwarranted Gain Recognition.
    • Selling Undervalued Assets to Generate Reportable Gains.
  • ASC 605-10, Overall
• Definitions of Terms
• Concepts, Rules, and Examples
  • The Installment Method
  • The Cost Recovery Method
  • ASC 605-15, Products
• Perspective and Issues
  • Channel Stuffing
    • Sales Where Right of Return Exists.
• Definitions of Terms
• Concepts, Rules, and Examples
  • • Example of Sale with Right of Return
  • Requirements for Revenue Recognition Met
  • Requirements for Revenue Recognition Not Met
    • Future Returns Cannot Be Estimated.
    • Example—Future Product Returns: Returns Cannot Be Estimated
  • Other Issues
    • Accounting for Revenues Related to Vaccine Stockpiles.
  • ASC 605-20, Service Revenues