Revenue Recognition: Terminology Concepts
“Revenue Recognition isn’t going anywhere, so the CICPAC members are excited to share another valuable document focused on the aspects of the new standard that are affecting the construction industry.”
Since May 2014, we have been investigating the future impact and implementation of ASC 606, the new revenue recognition standard. This industry-standard revenue recognition model was designed to help streamline company and industry financial statements for comparability, with the overall goal to decrease the complexity of revenue recognition.
Part of learning the standard is understanding the terminology and concepts. CICPAC has compiled this Revenue Recognition Terminology & Concepts document to summarize the new terms as they relate to the old terms or to define what the new terms are referencing.
Please use this document in conjunction with CICPAC’s previously released Revenue Recognition Implementation Guide, which includes topics related to:
- Identifying contracts with customers
- Assessing multiple performance obligations
- Series of performance obligations
- Evaluating variable consideration
- Uninstalled materials
- Recognizing revenue
- Fulfillment costs
- Capital costs to obtain a contract
- Transition method