Identifying the Five Steps of Revenue Recognition A customer purchases a pair of shoes from a retailer at a local mall on June 1, 2020, for $60, which is the standalone selling price of the shoes. The customer paid for the shoes with a credit card and immediately takes possession of the shoes. Use this example to demonstrate the five steps of the revenue recognition process. Application of the revenue recognition step Step 1 Description of revenue recognition step Step 2 Step 3 Step 4 Step 5 $ 0 $ *Step 4: Application of the revenue recognition step is based on allocation of transaction price to pair of shoes Description of revenue recognition step Step 1 Step 2 Step 3 Allocate the transaction price to the performance obligation(s). Step 4 Determine the transaction price. Estimate a standalone selling price. Step 5 Identify contract modifications. *Step Chec Identify the contract assets and liabilities. Identify the contract. Identify the performance obligation(s). One obligation to provide a pair of shoes. Application of Sa Recognize a loss in the period known. Recognize revenue when the performance obligation is satisfied. Retailer recognizes revenue when cash is collected from credit card processing Retailer recognizes revenue when customer takes possession of the shoes. Retailer will provide a pair pairs of shoes to customer in exchange for $60 cash. Two obligations: to provide a pair of shoes and deliver the shoes. of t