Under FASB ASC 606, the first step in the revenue recognition process is to
A) Determine the transaction price
B) Identify the contract with customers
C) Allocate transaction price to the separate performance obligations
D) Identify the separate performance obligations in the contract

Question

Quizplus · Accepted Answer

The first step in the revenue recognition process under FASB ASC 606 is to identify the contract with customers. This involves determining if the contract is enforceable, contains commercial substance, identifies the rights and obligations of both parties, and has a clear payment and collection process. Only once a contract with a customer has been identified can the other steps, such as determining the transaction price and identifying performance obligations, be taken.

Under FASB ASC 606, the First Step in the Revenue