ASC 606 Insights: Managing Variable Consideration and Modifications (Course Id 2416)

• Who is this course for?
  This course is designed for anyone needing Continuing Professional Education (CPE), particularly CPAs, accountants, and finance professionals seeking a better understanding of revenue recognition under ASC 606.

• What is this course about or what problem does this course solve?
  The course addresses complex revenue recognition challenges under ASC 606, focusing on variable consideration, contract modifications, and significant financing components.

• How can the knowledge from this course be used?
  Participants can use the knowledge to accurately estimate variable payments, handle contract modifications correctly, and apply appropriate revenue recognition methods in accordance with ASC 606.

• Why is this course important to a CPA, Accountant, or IRS Enrolled Agent?
  It provides essential guidance on critical aspects of ASC 606, enabling professionals to ensure compliance and accuracy in financial reporting.

• When is this course relevant or timely?
  The course is especially timely following the release of its current version in 2024, aligning with ongoing ASC 606 implementation and compliance efforts.

• How is a course like this consumed or used?
  This is a self-paced, text-based QAS self-study course delivered online, requiring completion of reading materials and a final exam with a passing score of 70% for CPE credit.

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.

NASBA QAS - Text - NASBA Registry - 2416

Chapter 1
Variable Consideration and Significant Financing Components

• 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

Chapter 2
Accounting for Contract Modifications

• 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

Chapter 1 - Variable Consideration and Significant Financing Components

Chapter Overview

Learning Objectives

Introduction

Variable Consideration

Methods to Estimate Variable Consideration

Constraining Estimates

Significant Financing Components

Conclusion

Review Questions

Chapter 2 - Accounting for Contract Modifications

Chapter Overview

Learning Objectives

Introduction

Approval of the Modification

Modification Approval Assessment

Modification Accounted for as Separate Contract

Modification Not Accounted for as a Separate Contract

Conclusion

Review Questions

Glossary of Key Terms