Question

Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org).

Required: Determine the specific citation for accounting for each of the following items:

1. What alternative approaches can be used to estimate variable consideration?

2. What alternative approaches can be used to estimate the stand-alone selling price of performance obligations that are not sold separately?

3. What determines the timing of revenue recognition with respect to licenses of symbolic intellectual property?

4. What indicators suggest that a seller is a principal rather than anagent?

Answer 1

Requirement 1 Regarding the alternative approaches that can be used to estimate variable consideration, the appropriate citation is: FASB ASC 606–10–32–8: “Revenue from Contracts with Customers–Overall–Measurement–Variable Consideration.”

Requirement 2 Regarding the alternative approaches that can be used to estimate the stand-alone selling price of performance obligations that are not sold separately, the appropriate citation is: FASB ASC 606–10–32–34: “Revenue from Contracts with Customers–Overall–Measurement–Allocation Based on Standalone Selling Prices.”

Requirement 3 Regarding the timing of revenue recognition with respect to licenses, the appropriate citation is: FASB ASC 606–10–55–58-60: “Revenue from Contracts with Customers–Overall–Implementation Guidance and Illustrations–Determining the Nature of the Entity’s Promise.”

Requirement 4 Regarding the indicators to determine whether a seller is a principal rather than an agent, the appropriate citation is: FASB ASC 606-10-55-37: “Revenue from Contracts with Customers–Overall–Implementation Guidance and Illustrations–Principal versus agent considerations” and to assist in determining the indicators it is FASB ASC 606-10-55-39: “Revenue from Contracts with Customers–Overall–Implementation Guidance and Illustrations–Principal versus agent considerations”.