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U.S. GAAP Codification of Accounting Standards |
| U.S. GAAP Codification | Accounting Standards, ASC |
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U.S. GAAP
Codification of Accounting Standards |
| U.S. GAAP Codification Updates |
| Principles of Accounting, Intermediate Accounting, Advanced Accounting |
| Accounting Terms |
| Codification Topic 605-25 Revenue Recognition Multiple-Element Arrangements Revenue Recognition ASC 605-25 was updated by ASU 2009-13 --> to reflect the contents of EITF 08-1 EITF Issue No. 08-1 "Revenue Recognition with Multiple Deliverables --> EITF No. 08-1 superseded EITF No. 00-21 EITF Issue No. 00-21 "Revenue Recognition with Multiple Deliverables General Principles 1. Multiple-Deliverable Revenue Arrangements (MDRA) --> divided into separate units of accounting --> if two conditions listed in ASC 605-25-25-5 are satisfied [Note] EITF 00-21 had three conditions. EITF 08-1 deleted one condition. 2. Arrangement consideration is allocated --> based on the relative selling prices --> "relative selling price method" [Note] EITF 00-21 used the "relative fair value method" Two conditions for a separate unit of accounting 1. Delivered items have value to the customer --> on a standalone basis 2. Delivery of undelivered items is --> considered probable and --> under the substantial control of the vendor [Note] EITF 00-21 had one more condition that was deleted by EITF 08-1 --> Undelivered items should have --> the objective and reliable "evidence of fair value" Relative selling price method adpted by EITF 08-1 (ASU 2009-13) Arrangement consideration is allocated --> at the inception of the arrangement --> based on their "relative selling prices" Selling price is determined using --> the "Vendor Specific Objective Evidence" (VSOE) of selling price If VSOE does not exist --> use the "Third-Party Evidence" (TPE) of selling price If both VSOE and TPE are not available --> use the "best estimate" of selling price Examples of EITF 08-1 1. Cellular telephone contract 2. Can manufacturing equipment 3. Standard equipment installation 4. Automobiles sold with lifetime maintenance services 5. Sale of home appliances with installation and maintenance services 6. Human resources outsourcing services 7. Sale of medical equipment with cartridges and installation 8. Sale of computer system 9. Sale of 12 bolts of fabric 10. Painting contract 11. Agricultural equipment |
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Codification Topic 605 Revenue Recognition |
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Subtopics of Codification Topic 605 605-10 Overall 605-15 Products 605-20 Services 605-25 Multiple-element arrangements 605-30 Rights to use 605-35 Construction-type and production-type contracts 605-40 Gains and losses 605-45 Principal agent considerations 605-50 Customer payments and incentives |
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Accounting Terms of Codification Topic 605-10 Readily convertible to cash |
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Accounting Terms of Codification Topic 605-15 Warranty |
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Accounting Terms of Codification Topic 605-20 Extended warranty Product maintenance contracts Retrospective insurance arrangements Separately priced contracts |
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Accounting Terms of Codification Topic 605-25 |
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Accounting Terms of Codification Topic 605-30 |
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Accounting Terms of Codification Topic 605-35 Contractor Cost-plus-award-fee contract Cost-plus-fixed-fee contract Cost-plus-incentive-fee contract (incentive based on cost) Cost-plus-incentive-fee contract (incentive based on performance) Cost-sharing contract Cost-type contracts Cost-without-fee contract Firm fixed-price contract Fixed-price contract with economic price adjustment Fixed-price contract providing for firm target cost incentives Fixed-price contract providing for performance incentives Fixed-price contract providing for prospective periodic redetermination of price Fixed-price contract providing for retroactive redetermination of price Fixed-price contract providing for successive target cost incentives Fixed-price level-of effort term contract Fixed-price contracts Profit center Time-and-material contracts Unit-price contracts |
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Accounting Terms of Codification Topic 605-40 |
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Accounting Terms of Codification Topic 605-45 Handling costs Shipping costs |
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Accounting Terms of Codification Topic 605-50 Breakage Buydowns Cash consideration Consideration Cooperative advertising Customer Reseller Slotting fees Vendor |
| Other Topics at the Codification 600 |
| Accounting Standards Codification, ASC, Overview |
| ASC Codification Topic 605: Revenue Recognition |
| Topic 605 is the only topic at the 600 level. |
| U.S. GAAP by Topic |
| Accounting Topics |
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