The ASC 606 revenue recognition standard was developed jointly by the Financial Accounting Standard’s Board (FASB) and International Accounting Standards Board (IASB). It provides a framework for businesses that enter into contracts with customers to transfer goods or services to recognize revenue more consistently.
The IDI platform supports the sale of a service that involves items and conditions that make it applicable to the FASB ASC 606; specifically, a retail sale involving the activation of a monthly-billed service that includes retail-discounted equipment for acceptance of a contract. For example, a customer receives a $500 discount on a new handset by agreeing to the terms and conditions of a 2-year Contract. When these sales and FASB ASC 606-supporting conditions are met, the solution will capture and calculate the amount of the Contract Asset which will be used by Billing and General Ledger posting of the newly sold service.
Contracts and Retail Discount Reason must be marked as eligible for use in FASB ASC 606 Eligible sales scenarios to support downstream billing and general ledger functionality.
For further details, refer to the FASB ASC 606 Revenue Recognition Standards article in the IDI Billing Solutions Knowledge Center.