Revenue Recognition for Long-Term Construction and Similar Contracts: Topic 606 Implementation Challenges
Friday, July 23, 2021
For those entities who currently recognize revenue under the guidance of Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts (SOP 81-1/ASC 605-35), understanding the basics of Topic 606 is not enough. In order to assess the impact of adopting Topic 606, you need a detailed understanding of whether you can recognize revenue over time under Topic 606 or not. Plus, applying the other steps of Topic 606's five-step revenue recognition model could also result in entities making changes to their current revenue recognition approaches.
Even with the recent FASB deferral, Topic 606's effective date is here. Now is the time to get the answers to your implementation questions. In this course, we will explore Topic 606 from the perspective of entities that currently recognize revenue under SOP 81-1/ASC 605-35, highlighting areas of potential change in your current approach following the adoption of ASC Topic 606, such as identifying performance obligations and when and how you recognize revenue. Lastly, we will review the financial reporting impact of changes that many companies are making to their revenue recognition processes as a result of COVID-19.
Applying Topic 606 to your long-term contracts will definitely change your revenue recognition approach. This course will help you determine how big that change will be.
- Identify the five steps of Topic 606’s new revenue recognition model
- Determine the criteria that supports recognizing revenue over time under Topic 606
- Apply Topic 606’s guidance in other areas of interest to entities currently using SOP 81-1
- Recall best practices and lessons learned from others implementing Topic 606
- Topic 606’s five-step revenue recognition model
- Determining whether to recognize revenue over time or at a point in time under Topic 606
- Other unique considerations in applying the five-step model for entities currently using SOP 81-1/ASC 605-35
- Accounting considerations related to COVID-19-driven changes to revenue recognition processes
- Lessons learned and best practices from entities already adopting Topic 606