Understanding Revenue Recognition Guidance
In 2014, the FASB issued their much anticipated and finalized standard, Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASC 606).
ASC 606 replaces all existing revenue recognition guidance and applies to all entities who enter into contracts with customers unless those contracts are within the scope of other standards. The reporting impacts for entities vary by industry, as well as the number and types (custom or standard) of contracts.
Even if the reporting for an entity is not considered significant, companies must still go through the process to review their contracts, assess any changes, and quantify their assessment.