Revenue Recognition Guide (2021) (U.S.)

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A comprehensive reference manual covering key concepts and issues that arise in determining when and how to recognize revenue. It covers the new authoritative literature related to revenue recognition that must be adopted beginning in 2020 for many companies.

Author: Scott A. Taub

Revenue Recognition Guide clarifies revenue recognition concepts and principles, and provides insight into issues that have been addressed as the accounting profession prepares to adopt the new revenue recognition literature.

This edition incorporates changes in accounting literature and interpretive developments through April 2020.

Overall the Guide provides:

  • Expert, independent analysis of the new FASB and IASB principles-based standards for revenue recognition
  • Plain English discussion of all aspects of the standards
  • Explanations and illustrations of key points and judgments
  • Illustrations and Practice Pointers highlighting key consequences of the accounting guidance and identifying issues to watch for when dealing with certain revenue transactions
  • Discussion of issues that are important to the SEC
  • References to pertinent paragraphs of the authoritative literature and to GAAP examples addressing key points

This edition of the guide provides comprehensive discussion of the new authoritative literature on revenue recognition that is included in Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, and IFRS 15, Revenue from Contracts with Customers. As public companies adopted the new standard in 2020, the book includes excerpts from public filings illustrating many of the principles of the new standards. The book concludes with a chapter on transitioning to the new standard, as private companies will be applying the standard for the first time in late 2020 and early 2021.

Within the 15 chapters of the book, the text includes references to the paragraphs of the authoritative literature that address key points. In addition, references are included to relevant examples in the accounting literature that highlight the application of the requirements. This book also includes a number of illustrations that focus on key points, and a number of Practice Pointers that highlight key consequences of the guidance and identify issues to watch for when dealing with certain revenue transactions.

Objectives and Framework

  • Chapter 2, “Scope and Overview of Topic 606/IFRS 15,” explains the objectives and core principles of the new revenue recognition standards, and provides a high-level discussion of the five-step model that frames the guidance on determining the amount of revenue and the timing of revenue recognition. Chapter 2, “Scope and Overview of Topic 606/IFRS 15,” also discusses the scope of the new guidance.
  • Chapters 3-7 provide a detailed discussion of each of the five steps in the model, including implementation guidance in the standard, as well as guidance that has resulted from discussions of the TRG and the IFRIC.

Related Matters

  • Chapter 8, “Continuing Involvement,” discusses guidance in Topic 606/IFRS 15 on certain additional matters, including common contract terms such as warranties, rights of return, repurchase provisions, and options for additional goods and services.
  • Chapter 9, “Costs of Contracts with Customers,” addresses the guidance on costs of revenue transactions.
  • Chapter 10, “Presentation,” addresses matters of the presentation of revenue transactions in balance sheets and income statements, including discussion of whether to recognize transactions on a gross or net basis.

Application to Common Arrangements

  • Chapters 11-13 then explain how the model would apply to common issues faced in the delivery of products, services, and intellectual property to customers. Explaining how the five steps apply to common transactions is intended to both provide practical guidance for readers and reinforce the understanding of the principles of the standard.

Financial Reporting

  • Chapter 14, “Disclosure,” addresses disclosures required by the new literature that go far beyond the disclosure requirements that currently exist. This chapter also discusses revenue disclosures required in SEC filings in areas other than the financial statements.

Finally, Chapter 15, “Transition,” discusses the transition to the new standard. That discussion will be deleted in future version of this Guide, as all companies are required to adopt the new standard by the end of their fiscal year that begins in 2020.


8/31/2020       600 pages       9780808054825

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Publication DateJul 31, 2020