- Identify the contract(s) with a customer
- Identify the performance obligations in the contract
- Determine the transaction price
- Allocate the transaction price to performance obligations in the contract
- Recognize revenue when (or as) the entity satisfies a performance obligation
- Provision that collectability should be considered “probable” in order to recognize revenue
- The “transaction price” is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (i.e. sales taxes).
- Clarifies that the measurement date for noncash consideration (which, according to ASU 2014-09 is measured at fair value), is contract inception
- Clarifies that if an entity is retrospectively adopting ASU 2014-09, it does not need to disclose the effect of the accounting change for the period of adoption (to do so would require the entity to calculate revenue recognition under prior GAAP).
- Adjustment to guidelines for contract modifications at transition
- Language Clarification: the definition of “completed contract”