Add to favorites
The first step in applying the revenue standard is to determine if a contract exists and whether that contract is with a customer. This assessment is made on a contract-by-contract basis, although as noted in RR 1.2.2, as a practical expedient a reporting entity may apply this guidance to a portfolio of similar contracts (or similar performance obligations) if the reporting entity expects that the effects on the financial statements would not materially differ from applying the guidance to the individual contracts (or individual performance obligations).
Management needs to identify whether the contract counterparty is a customer, since contracts that are not with customers are outside of the scope of the revenue standard. Management also needs to consider whether the contract is explicitly scoped out of the revenue standard, or whether there is another standard that applies to a portion of the contract. Determining whether a contract is in the scope of the revenue standard will not always be straightforward.
Management must also consider whether more than one contract with a customer should be combined and how to account for any subsequent modifications.
Expand

Welcome to Viewpoint, the new platform that replaces Inform. Once you have viewed this piece of content, to ensure you can access the content most relevant to you, please confirm your territory.

Your session has expired

Please use the button below to sign in again.
If this problem persists please contact support.

signin option menu option suggested option contentmouse option displaycontent option contentpage option relatedlink option prevandafter option trending option searchicon option search option feedback option end slide