What is ASC Topic 605?
Revenue Recognition (Topic 605) Multiple-Deliverable Revenue Arrangements. a consensus of the FASB Emerging Issues Task Force. Accounting Standards Update. Financial Accounting Standards Board.
What are some issues related to ASC 606?
Accurately determining performance obligations is a common problem when implementing ASC 606. Improperly identified performance obligations can be difficult to change and restatement of financial statments may be required.
What is ASC in US GAAP?
The Accounting Standards Codification (ASC) is developed and maintained by the FASB. The ASC is the only source of authoritative GAAP in the US (other than SEC issued rules and regulations that only apply to SEC registrants).
Is ASC 606 Part of GAAP?
ASC 606 creates a framework within GAAP for recognizing revenue from customer contracts. It’s meant to standardize and streamline the accounting of contract-based transactions.
What does the change to ASC 606 mean for investors?
As investors it’s a good idea to get a quick overview of the basics of this change. The reason for the change from ASC 605 to 606 was to bring U.S. GAAP accounting standards for revenue recognition more in line with International Financial Reporting Standards (IFRS) while also standardizing revenue recognition across industries.
How does the 605 to 606 accounting change affect you?
So usually what you’ll see with the 605 to 606 accounting change going forward is deferred revenue on the balance sheet go down and revenue on the income statement go up.
Do I need a subscription to view ASC 605?
You must log in to view this content and have a subscription package that includes this content. ASC 605 provides industry-specific guidance for entities in the software industry, entities that enter into construction-type or production-type contracts, and entities in the entertainment and financial services industries, among others.
What is the measurement of revenue per period under ASC 6605?
605-25-30-6 The measurement of revenue per period shall be limited to the measurement that results from assuming that cancellation of the arrangement will not occur.