Revenue contract modifications: 5 things you need to know

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PwC's Heather Horn and Angela Fergason discuss 5 things you need to know about accounting for contract modifications under the new revenue standard.

Accounting for contract changes under the new revenue standard can be complex, and not all modifications are accounted for the same. Tune in as Angela Fergason joins Heather Horn to help navigate the guidance by sharing 5 things you need to know about contract modifications under ASC 606. Topics include:

  • 0:47 - Definition of contract modification. Before we jump into the accounting, Angela explains what a contract modification is under the new revenue standard.

  • 2:09 - Modifications accounting model. Angela explains the accounting for different types of contract modifications. (See table

  • 4:54 - Key areas of judgment. After discussing the basic framework, Angela and Heather discuss the judgments that impact the conclusion.

  • 8:47 - Operational challenges. Having the right processes and controls in place is important. We tell you where to start.

  • 10:55 - Disclosures. Before closing the show, we give a heads up on some of the disclosures that could be impacted by a modification.

About our guest

Angela Fergason is a partner in PwC's National Office with 20 years of experience specializing in accounting for revenue and employee compensation arrangements. She is  a frequent speaker on accounting and financial reporting topics and is a contributor to many PwC National Office publications, including accounting guides on Revenue and Stock-based compensation.

About our host

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting. 

Contact us

Heather Horn

Heather Horn

US Strategic Thought Leader, National Professional Services Group, PwC US

David Schmid

David Schmid

International Accounting Leader, National Professional Services Group, PwC US

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