1.9 Beyond the Core Model

The revenue standard also affects other related accounting topics and contains disclosure requirements, as discussed in Sections 1.9.1 and 1.9.2.

1.9.1 Other Related Accounting Topics

Additional accounting topics affected by the revenue standard are summarized in the table below.

Topic	Roadmap Chapter
Combination of contracts There are certain circumstances in which multiple legal-form contracts would be accounted for as though they were one contract for accounting purposes. The revenue standard provides guidance on when contracts should be combined.	Chapter 4
Rights of return The obligation of a seller to “stand ready” to accept a return is not a performance obligation. However, when a seller stands ready to accept a return, it does not recognize revenue for goods expected to be returned. Rather, it recognizes a refund liability for consideration paid by a buyer to which the seller does not expect to be entitled, together with a corresponding asset to recover the product from the buyer.	Chapter 6
Customers’ unexercised rights An entity recognizes “breakage” (i.e., a customer’s unexercised rights) in a manner consistent with the pattern of rights exercised by the customer if the entity expects to be entitled to a breakage amount; otherwise, the entity defers recognition until the probability that the customer will exercise its rights is remote.	Chapter 8
Contract modifications The revenue standard provides a general framework of accounting for contract modifications, including guidance on when modifications are accounted for as a separate contract and how changes should be recorded.	Chapter 9
Principal-versus-agent considerations The revenue standard includes control-based guidance on determining whether the promise an entity has made to a customer is to provide the good or service or to arrange for another party to fulfill the promise.	Chapter 10
Licensing The revenue standard’s guidance on licensing distinguishes between two types of licenses (right to use and right to access). The timing of revenue recognition is different for each.	Chapter 12
Costs of obtaining or fulfilling a contract The revenue standard includes guidance on how to account for costs related to a contract, distinguishing between costs of obtaining a contract and costs of fulfilling a contract. For situations in which the application of this guidance results in the capitalization of costs, the revenue standard provides additional guidance on (1) determining an appropriate amortization period and (2) impairment considerations.	Chapter 13
Presentation The revenue standard includes guidance on the presentation of contract assets, contract liabilities, and receivables arising from contracts with customers.	Chapter 14
Nonpublic-entity requirements The revenue standard provides nonpublic entities with disclosure practical expedients.	Chapter 16
Nonfinancial assets ASU 2014-09 (as amended by ASU 2017-05) provides guidance on the recognition and measurement of transfers of nonfinancial assets to parties that are not customers (codified in ASC 610-20).	Chapter 17

1.9.2 Required Disclosures (Chapter 15 of the Roadmap)

ASC 606-10-50-1 requires entities to disclose both quantitative and qualitative information that enables “users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.” ASC 606’s disclosure requirements include the following (there are certain exceptions for nonpublic entities; see Chapter 16 for a summary of these exceptions):

Presentation or disclosure of revenue from contracts with customers and any impairment losses recognized separately from other sources of revenue or impairment losses from other contracts (e.g., leases).
A disaggregation of revenue to “depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors” (the standard also provides implementation guidance).
Information about (1) contract assets and contract liabilities (including changes in those balances), (2) the amount of revenue recognized in the current period that was previously recognized as a contract liability, and (3) the amount of revenue recognized in the current period that is related to performance obligations satisfied in prior periods.
Information about performance obligations (e.g., types of goods or services, significant payment terms, typical timing of satisfying obligations, and other provisions).
Information about an entity’s transaction price allocated to the remaining performance obligations, including (in certain circumstances) a quantitative disclosure of the “aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied)” and when the entity expects to recognize that amount as revenue.
A description of the significant judgments, and changes in those judgments, that affect the amount and timing of revenue recognition (including information about the timing of satisfaction of performance obligations, the determination of the transaction price, and the allocation of the transaction price to performance obligations).
Information about an entity’s accounting for costs to obtain or fulfill a contract (including account balances and amortization methods).
Information about policy decisions (i.e., whether the entity used the practical expedients for significant financing components and contract costs allowed by the guidance).

The guidance requires entities, on an interim basis, to disclose information required under ASC 270 as well as to provide the disclosures (described above) about (1) the disaggregation of revenue, (2) contract asset and contract liability balances and significant changes in those balances since the previous period-end, and (3) the transaction price allocated to the remaining performance obligations.

IFRS 15 only requires entities to disclose the disaggregation of revenue in addition to the information required under IAS 34 for interim periods. For a summary of differences between U.S. GAAP and IFRS Accounting Standards, refer to Appendix A.

Confidential and Proprietary — for Use Solely by Authorized Personnel

This publication provides comprehensive guidance; however, it does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.