Identify the contract(s) with a customer. Identify the performance obligations in the contract.
Recently Issued Accounting Pronouncements
Revenue Recognition
The FASB has issued Accounting Standards Update (A SU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), that a ffects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non financial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue rec ognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidanc e. The core principle of the guidance is that an entity should recognize revenue to depictthe transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity
should apply the following steps:
Identify the contract(s) with a customer.
Identify the performance obligations in the contract.
Determine the transaction price.
Allocate the transaction price to the performance obligations in the contract.
Recognize revenue when (or as) the entity satisfies a performance obligation.