Handbooks   |   December 2017

Handbook: Revenue recognition

KPMG’s guidance on and interpretation of ASC 606. KPMG explains the new revenue recognition standard in detail, providing examples and analysis.


ASC Topic 606 and ASC Subtopic 340-40  (ASU 2014-09ASU 2015-14ASU 2016-08,  ASU 2016-10,  ASU 2016-11ASU 2016-12ASU 2016-20ASU 2017-13ASU 2017-14)

  • All companies

Relevant dates

Mandatory effective dates and early adoption provisions:

Effective date:

Public business and certain other entities*

All other entities

Annual periods – Fiscal years beginning after

Dec. 15, 2017

Dec. 15, 2018

Interim periods – In fiscal years beginning after

Dec. 15, 2017

Dec. 15, 2019

Early adoption allowed in fiscal years beginning after

Dec. 15, 2016

Dec. 15, 2016

* (1) public business entities; (2) not-for-profits that have issued, or are conduit bond obligors for, securities that are traded, listed or quoted on an exchange or an over-the-counter market; and (3) employee benefit plans that file financial statements with the SEC.

Key impacts

Provides interpretive guidance on FASB ASC 606, including illustrative examples to explain key concepts and highlights the changes from legacy US GAAP. Incorporates:

  • ASU 2016-20, technical corrections and improvements to ASC 606
  • ASU 2016-12, narrow-scope improvements and practical expedients
  • ASU 2016-10, identifying performance obligations and licensing
  • ASU 2016-08, principal versus agent considerations (reporting revenue gross versus net)
  • ASU 2014-09, revenue from contracts with customers
  • ASU 2016-11ASU 2017-13, and ASU 2017-14, amendments to SEC guidance related to ASC 606

This December 2017 edition includes new and updated interpretations based on our experiences with companies implementing Topic 606, as well as discussions with the FASB and SEC staff.

Report contents

  • Scope
  • Step 1: identify the contract(s) with a customer
  • Step 2: identify the performance obligations in the contract
  • Step 3: determine the transaction price
  • Step 4: allocate the transaction price to performance obligations
  • Step 5: recognize revenue when (or as) the entity satisfies a performance obligation
  • Customer options for additional goods or services
  • Principal vs. agent
  • Licensing of intellectual property
  • Contract modifications
  • Contract costs
  • Loss contracts
  • Presentation and disclosure
  • Effective date and transition

Spotlight on contributors

Nick Burgmeier

Nick Burgmeier

Partner, DPP, KPMG (US)

+1 212-909-5455
Meredith Canady

Meredith Canady

Partner, DPP, KPMG (US)

+1 212-909-5858
Scott Muir

Scott Muir

Partner, DPP, KPMG (US)

+1 212-909-5073
Paul Munter

Paul Munter

Partner, DPP, KPMG (US)

+1 212-909-5567



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