As you probably know, revenue recognition can be a challenging process. With all of the changes that will be brought by ASC 606, it’s more important than ever to have a good grasp of the basics. To master those, there’s no better place to start than understanding the four principles of revenue recognition.
Tensoft’s most popular guest presenter and revenue recognition expert, Jeffrey Werner, does a great job of breaking down the four principles. His two-day online course on this topic normally begins with this. The following video clips from “Revenue Recognition for Technology Companies,” a webcast co-hosted by Tensoft, along with Novadek, a Tensoft company – will give you a solid foundation and/or a quick refresher course.
Evidence of arrangement exists-
Fee is fixed and determinable-
Delivery or performance has occurred-
Collectability is probable-
Please note that it is important to meet all four of the criteria mentioned above in order to recognize revenue from a transaction.