Record contract revenue the way ASC 606 requires

The first two steps establish the customer agreement and the goods or services that need separate accounting. • Review approval, enforceable rights and payment terms. • Assess whether the arrangement has a business purpose and collection is probable. • Identify performance obligations, the distinct goods or services promised to the customer. • Assess bundled offerings and a series of similar goods or services. You receive the agreed contract inventory and analysis of the promises requiring separate accounting.

The next two steps establish the expected contract price and divide it among the identified promises. • Review fixed payments and variable amounts such as returns or conditional payments. • Assess significant financing terms and noncash payments. • Document standalone selling prices, the prices for goods or services sold separately. • Allocate the price using relative selling prices and assess discounts. • Consider estimation methods, including a residual approach that uses the amount left after other items are priced, where appropriate. You receive the agreed price calculations and documentation supporting the allocation.

The fifth step determines when control of the promised goods or services passes to the customer. • Assess whether each promise is fulfilled at a point in time or over time. • Review the evidence that control has transferred. • For work recorded over time, assess progress using resources consumed or results delivered. • Document the effect of contract changes. You receive the agreed revenue schedules and written conclusions supporting the recording dates.

The agreed scope can cover a policy review, implementation work and ongoing contract support. • Review the contract inventory, revenue sources and differences from current policies. • Prepare five-step analysis memos and selling price documentation. • Develop revenue policies, staff procedures and disclosure templates. • Review new contracts and modifications on the agreed schedule. • Prepare supporting records for audit questions. You receive the agreed analysis, policy documents, schedules and disclosure materials.