Worked-example setupScope and assumptions
- Cedar Trail is fictional, and all quantities refer to one identified product at December 31.
- The executed agreements are complete and unmodified for this exercise.
- The inbound agreement transfers control and an unconditional payment duty when the carrier accepts identified goods.
- Cedar Trail controls the unsold units at the consignee and can require their return or redirection.
- Period
- December 31 reporting date
- Units
- Inventory units
- Rounding
- Whole inventory units; no rounding required
Cedar Trail's warehouse count contains 70 units. Fifteen are supplier-owned demonstration units. Cedar Trail also owns 12 unsold units at a consignee and 8 inbound units accepted by a carrier on December 30.
Read the evidence before changing the count. The supplier agreement lets the supplier require return of the 15 demonstration units, and Cedar Trail has no unconditional payment duty before an end-customer sale. Cedar Trail can require return or redirection of its 12 units at the consignee. The inbound purchase agreement transfers control and an unconditional payment duty when the carrier accepts identified goods. Carrier records show acceptance before year-end.
The rights ledger therefore produces this reconciliation:
Warehouse count 70
Remove supplier-owned demonstration (15)
Add owned units held by consignee 12
Add controlled inbound units 8
Owned inventory at December 31 75
Cedar Trail records the 8 inbound units and related payable in the year-end period. It keeps the 12 unsold consignee units in inventory and records no revenue merely for their delivery to the consignee. It excludes the 15 supplier-owned units and records no purchase merely for possession.
ASC 606-10-55-82 ties a shipment-or-delivery transfer point to the contract terms. The example therefore uses the executed transfer condition and carrier event together. It does not infer control from the shipment's location or label alone.
ASC 606-10-25-30 provides control indicators for the customer sale analysis. ASC 606-10-55-79 through 55-80 addresses products delivered under consignment arrangements.
The calculation proves that the four supplied quantities produce 75 units. It does not prove that the agreements are complete, the event records are authentic, the identified goods match those agreements, or the transfer terms are enforceable. Those matters remain evidence and legal questions.
Now prepare the independent Northstar reconciliation.
Verified calculation · scoped sums
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- amounts
- 4 fields
Inspect data
{
"counted_units": 70,
"inbound_controlled_units": 8,
"owned_units_at_consignee": 12,
"supplier_owned_consigned_units": -15
}- totals
- 1 field
Inspect data
{
"owned_inventory_units": [
"counted_units",
"supplier_owned_consigned_units",
"owned_units_at_consignee",
"inbound_controlled_units"
]
}Recomputed result
| Measure | Value |
|---|---|
| owned inventory units | 75 |