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Practice prompt · Q:revenue-from-contracts-with-customers/research-contract-to-reporting-001

Research one contract from promises through disclosure

Build a reproducible ASC 606 and ASC 340 40 research trail for allocation, revenue, balances, contract costs, and disclosure.

Updated Sep 20, 2026 Review due Nov 20, 2026
Practice

Check your answer

Write your response and explain your reasoning.

Use the Linden Peak worked example as a fact packet, not as accounting authority. Build a research record that another person can repeat.

  1. List the contract judgments that the example supplies rather than proves.
  2. Find the ASC 606 paragraphs that govern distinct promises, allocation, transfer, contract balances, and unconditional receivables.
  3. Assume Linden Peak also pays a recoverable commission only because it obtains the contract. Find the ASC 340-40 paragraphs that govern recognition, amortization, and impairment of that cost.
  4. Find the effective disclosure requirements for contract balances and remaining performance obligations. Record any pending text and explain whether it applies to the reporting date.
  5. Explain what each paragraph decides and what it cannot establish from the supplied facts.
  6. State a bounded conclusion and name the contract, pricing, transfer, cost, or disclosure evidence still needed before release.

Record the research date, Codification version or access date, searches used, paragraph citations opened, and cross-references followed. End with the next fact that could change each conclusion.

Compare your reasoning with the worked answer

The research record should start with ASC 606-10-25-19 through 25-22 for the supplied distinctness conclusion. It should connect the allocation objective in 606-10-32-28 to the relative standalone selling price method in 32-31. ASC 606-10-25-23 governs recognition when or as the company transfers control, and 25-30 supplies the point-in-time path when an obligation does not qualify for over-time recognition. ASC 606-10-45-1 and 45-3 through 45-4 separate the net contract position from an unconditional receivable. For a supplied recoverable success-based commission, the record should inspect ASC 340-40-25-1 and 25-3, then 35-1 for amortization and 35-3 for impairment. The disclosure trail should inspect the effective version of ASC 606-10-50-8 for contract balances and 50-13 for remaining performance obligations. The record should not use those paragraphs to invent enforceability, distinctness, standalone selling prices, a transfer date, commission eligibility, a benefit period, or an exemption.