By now, the five-step revenue recognition model for recognizing revenue under ASC 606 is familiar to most accountants. The five steps of this model are: 1) Identify the contract with a customer; 2) Identify the performance obligation in the contract; 3) Determine the transaction price; 4) Allocate the transaction price; and, 5) Recognize revenue as performance obligations are satisfied.
At this point, I can almost hear you thinking: “Okay, great. But how does a revenue recognition solution like Tensoft Revenue Lens satisfy this model?” To be sure, some of these steps require judgement on the part of an experienced accountant. But wouldn’t it be helpful to have the ability to automatically update the transaction price of a contract when estimates change, so that variable consideration and contract modifications aren’t missed? And what if you could easily capture all of the relevant information from any sales transaction, wherever that sale is recorded – your website, your CRM, your ERP/accounting system, or another source?
Tensoft Revenue Lens Solution Consultant Jason Ochipa, CPA discussed this in his blog post “Revenue Recognition: Five-Step Model.” For more insight into how the Tensoft’s revenue recognition solution, Tensoft Revenue Lens, supports the five-step method under ASC 606, we’ve created this brief (4 minutes) video:
If you’re interested in learning more about how Tensoft Revenue Lens can help you with ASC 606, please view this recording on “ASC 606: Understanding Contract Modifications and Variable Consideration” webcast.