Question
The first three sections address revenue recognition that involves constraints. Accounting literature ASC 606 addresses revenue recognition and how to determine a transaction price when
The first three sections address revenue recognition that involves constraints. Accounting literature ASC 606 addresses revenue recognition and how to determine a transaction price when constraints are involved.
Section 1: Report. Read the first four pages in Variable Consideration and the Constrain (https://www.revenuehub.org//article/variable-consideration-constraint)., stopping at Diversity in Thought. Write a one-page report that addresses the bullets below. Your report should reference the Accounting Standards Codification, Section ASC 606 from Revenue From Contracts With Customers (Topic 606), using proper in-text citations. Include the following in your evaluation:
- Describe variable consideration.
- Explain what a company must do if a contract contains a variable consideration.
- Identify the items in a contract that generally result in a variable consideration.
- Explain the expected value and most likely approach.
- Summarize the factors to be considered in the analysis when a reversal could occur and why they are important.
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