ASC 606 Insights: Managing Variable Consideration and Modifications 

Course Overview:

This course provides an overview of critical challenges companies encounter under ASC 606, emphasizing several key areas that can be particularly challenging for effective revenue recognition. This includes considerations relating to variable consideration and accounting for contract modifications.  This course also addresses the accounting considerations related to significant financing components. 

Learning Objectives:

Upon completion of this course, you will be able to:

• Identify different types of variable payments in contracts, including discounts, rebates, and bonuses
• Recognize the importance of accurate estimation of variable payments for revenue recognition
• Determine appropriate methods for estimating uncertain payment amounts
• Distinguish between contracts with and without significant financing components
• Recognize factors that impact the time value of money in long-term payment contracts
• Identify when a contract modification is treated as a new contract or continuation of an existing one
• Recognize when additional goods or services in a modification are distinct
• Determine if the price adjustment reflects the standalone selling prices of the new goods or services
• Differentiate between contract modifications as separate contracts or part of the existing agreement
• Select the appropriate revenue recognition method for a contract modification