Handbooks | December 2021



Handbook: Revenue recognition

Latest edition: KPMG in-depth guide to the revenue standard, ASC 606.

Michael Kraehnke

Michael Kraehnke

Partner, Dept. of Professional Practice, KPMG US

+1 303-382-7172

Meredith Canady

Meredith Canady

Partner, Dept. of Professional Practice, KPMG US

+1 212-909-5858

Using detailed Q&As and examples as well as comparisons to legacy US GAAP, KPMG explains in-depth accounting for ASC 606.


ASC 606, ASC 340-40 and ASC 610-20

  • All companies

Relevant dates

Effective date

Public business and certain other entities* Other entities that had not issued or made available for issuance financial statements as of June 3, 2020**

Annual periods – Fiscal years beginning after       


Dec. 15, 2019

Interim periods – In fiscal years beginning after 


Dec. 15, 2020

Early adoption allowed in fiscal years beginning after

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.

** ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, deferred the effective date for those specific other entities by one year.


Key impacts

This December 2021 edition includes new and updated interpretations based on our experiences with companies applying ASC 606, as well as discussions with the FASB and SEC staff.

Incorporates the following:

  • ASU 2021-02, Franchisors—Revenue from Contracts with Customers (Subtopic 952-606): Practical Expedient
  • ASU 2020-10, Codification improvements
  • ASU 2020-05, Effective dates for certain entities (revenue and leases)
  • ASU 2019-08, Shared-based consideration payable to a customer
  • ASU 2018-18, Targeted improvements for collaborative arrangements
  • ASU 2018-08, Clarifying the scope and accounting guidance for contributions received and contributions made
  • ASU 2018-07, Improvements to nonemployee share-based payment accounting
  • ASU 2016-20, Technical corrections and improvements to ASC 606
  • 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

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

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