The five-step revenue recognition model
1.Use your own words to summarize the information from the textbook or the FASB Codification. Provide proper citations used, including the textbook.
- 200 words or more. Describe the concept of contracts with customers as it relates to the five-step revenue recognition model. Summarize one of the five conditions that signify a contract exists. Provide an example of a contract with a customer by describing the transaction and why a contract exists based on your facts and circumstances.
2.Select a publicly traded company and access its most recent financial statements, form 10-K, from its website. Include the name of the company in your subject line, and do not choose a company about which one of your classmates has already posted. Navigate to the notes to the financial statements and locate the company’s note on revenue recognition. Does the company follow the five-step revenue recognition model? How can you tell? In your own words, summarize how the company is applying the five-step revenue recognition model.
Participate in follow-up discussions by comparing your company’s five-step process to the company they chose. Specifically address, how the companies are similar or different and how the industry in which the company does business influences the application of the five-step model.
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