Revenue recognition standard released – ASU 2014-09

FASB has released the long-awaited standard for revenue recognition.

The super short version – There is a five step process to recognize revenue. From the Journal of Accountancy’s article, FASB, IASB release historic revenue recognition standard:

Companies would recognize revenue through a five-step process:

Step 1: Identify the contract with a customer.

Step 2: Identify the separate performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the separate performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

The translated, simplified effective date is 12/31/17 financial statements for public companies and 12/31/18 financials for nonpublic companies.

Some introductions here:

The ASU is available at the FASB’s website in three parts:

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