This Contract Abstract Analysis Tool relates to ASC Topic 606 including certain criteria for an agreement to meet the definition of a contract. If all criteria are not met, the contract is not within the scope of ASC 606 and any consideration received would be recognized as a liability.

This tool was created to help companies understand more clearly the steps involved in implementing ASC Topic 606. The following information includes the steps relating to contracts:

  1. Defining the Contract (written, oral or implied)
  2. Identifying the Performance Obligations
  3. Determination of the Transaction Price
  4. Allocating the Transaction Price to the Performance Obligations
  5. Recognizing Revenue when or as the Company Satisfies a Performance Obligation

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