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Revenue Recognition #361626

Course Overview

Credit

Amount

CPA

Course Author: Steven M. Bragg, CPA Field of Study (CPA): Accounting

Course Description

Course publication/revision date: This course was updated on 3/9/2026.

The recognition of revenue is among the most misunderstood areas of accounting, leading to ongoing arguments between management and auditors about how to account for various sales transactions. Revenue Recognition brings clarity to the topic by focusing on Topic 606, Revenue from Contracts with Customers, which describes the five-step process for recognizing many types of revenue. The discussion includes the establishment of a contract, the determination of performance obligations, and how to set and allocate prices. The course covers many ancillary topics as well, including the treatment of variable consideration, noncash consideration, price discounts, subsequent price changes, consignments, licensing, repurchase agreements, disclosures, and more. In short, when there is an issue about revenue recognition, consult this course.

Table of Contents

Chapter 1 - Revenue Recognition1

Topic 606, Revenue from Contracts with Customers	1
The Nature of a Customer	1
Steps in Revenue Recognition	2
Step One: Link Contract to Customer	2
Step Two: Note Performance Obligations	4
Step Three: Determine Prices	6
Variable Consideration	7
Possibility of Reversal	8
Time Value of Money	9
Noncash Consideration	11
Payments to Customers	12
Refund Liabilities	13
Step Four: Allocate Prices to Obligations	13
Allocation of Price Discounts	14
Allocation of Variable Consideration	15
Subsequent Price Changes	16
Step Five: Recognize Revenue	16
Measurement of Progress Completion	18
Output Methods	18
Input Methods	19
Change in Estimate	20
Progress Measurement	20
Right of Return	20
Consistency	21
Contract Modifications	21
Treatment as Separate Contract	22
Treatment as Continuing Contract	22
Entitlement to Payment	24
Contract-Related Costs	25
Costs to Obtain a Contract	25
Costs to Fulfill a Contract	25
Amortization of Costs	26
Impairment of Costs	27
Exclusions	27
Applicability	28

Chapter 2 - Other Revenue Topics30

Bill-and-Hold Arrangements	30
Consideration Received from a Supplier	31
Consignment Arrangements	33
Customer Acceptance	33
Customer Options for Additional Purchases	34
Donations	36
Gains and Losses from Nonfinancial Asset Derecognition	37
Licensing	37
Nonrefundable Upfront Fees	39
Principal versus Agent	40
Repurchase Agreements	41
Share-Based Payments to Customers	42
Unexercised Rights of Customers	42
Warranties	43

Chapter 3 - Revenue Presentation and Disclosure46

Presentation	46
Disclosures	46

Chapter 4 - Management of Revenue Recognition52

Identification of Customers	52
Contractual Consistency	52
Contract Aggregation	53
Performance Clarification	53
Variable Consideration Analysis	53
Time Value of Money Analysis	54
Standalone Selling Prices	54
Measurement of Progress Completion	55
Costs to Obtain a Contract	55
Bill-and-Hold Arrangements	55
Breakage	55

Answers to Chapter Questions58

Glossary63

Index64

Course Details

Author: Steven M. Bragg, CPA

Steven Bragg, CPA, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young. He received a master’s degree in finance from Bentley College, an MBA from Babson College, and a Bachelor’s degree in Economics from the University of Maine. He has been a two-time president of the Colorado Mountain Club, and is an avid alpine skier, mountain biker, and certified master diver. Mr. Bragg resides in Centennial, Colorado. He has written more than 300 books and courses, including New Controller Guidebook, GAAP Guidebook, and Payroll Management.

Publication/Revision Date: 3/9/2026

Course Exam Questions (online): 20 (multiple-choice)

Program Delivery Method: NASBA QAS Self-Study

Available Formats of Course Text: PDF or PDF plus printed copy sent in the mail

Course Level, Prerequisites, and Advance Preparation Requirements

License	Course Level	Prerequisites	Advance Preparation Requirements
CPA	Overview	None	None

* This program is appropriate for professionals at all organizational levels.

Sponsor ID Numbers

National Registry of CPE Sponsors ID: 107615

State CPA Board Sponsor ID Numbers (where applicable)

Florida Division of Certified Public Accounting: 0004761

Hawaii Board of Public Accountancy: 14003

New York State Board for Public Accountancy: 002146

Ohio Accountancy Board: CPE .51 PSR

Pennsylvania State Board of Accountancy: PX178025

Texas State Board of Public Accountancy: 009349

Learning Objectives

As a result of studying the course material, you should be able to meet the objectives listed below:

Identify the evaluation criteria for a contract, the components of the transaction price, and when a contract modification triggers treatment as a new contract.
Recognize the accounting treatment pertaining to customer acceptance clauses, rights to acquire additional goods, donations, asset repurchases, and breakage.
Recognize the situations under which contract liabilities occur, and when disaggregation is used.
Specify the methods used to control which third parties are recognized as customers, and to control the use of justification documents for standalone pricing.