Revenue accounting under ASC 606

Critical financial metrics for preparers and users

Revenue is one of the most important financial statement measure for both preparers and users of financial statements. In addition to being extensively scrutinized by stakeholders and regulators, revenue transactions are often highly complex and can involve significant judgment. Careful consideration and analysis of the facts and circumstances of customer contracts can have significant upstream and downstream impacts on financial statements, performance metrics, and the overall success of the business.

What are the common complexities of the ASC 606?

In our experience, judgments and challenges when evaluating contracts with customers can be extensive, and often relate to items outlined below:

  • Determination as to whether promised goods and services are distinct
  • Evaluation of principal vs. agent considerations
  • Accounting for variable consideration
  • Payments to customers
  • Allocation of contract consideration
  • Point in time vs. over time revenue recognition
  • Licensing arrangements
  • Contract modification

In addition to the complexities arising from the technical accounting evaluation, systematic application and tracking of such complexities across all revenue streams and contracts requires careful evaluation of system capabilities, processes and policies.

How PwC can help

PwC is a trusted resource for helping companies navigate the accounting and financial reporting challenges of revenue transactions. Our knowledge can help you develop strategies to withstand regulatory scrutiny, anticipate potential areas of focus in filings and meet constantly evolving expectations for clear and transparent financial reporting.

With PwC, your company can:

  • Understand accounting and reporting implications from revenue contracts
  • Determine appropriate accounting, tax, and regulatory compliance arising from revenue arrangements
  • Develop sound revenue accounting policies and processes
  • Provide solutions to operational challenges
  • Navigate a highly judgmental and challenging landscape

PwC has a highly credentialed group of Deals professionals with extensive experience helping clients navigate the complexities of revenue transactions. Contact your PwC advisor or one of our Deals professionals to discuss further.


{{contentList.dataService.numberHits}} {{contentList.dataService.numberHits == 1 ? 'result' : 'results'}}

Contact us

John Vanosdall

Accounting Advisory Solution Leader, PwC US


Chris Smith

Partner, Capital Markets and Accounting Advisory Services, San Jose, PwC US


Eliot Powell

Partner, Capital Markets and Accounting Advisory Services, PwC US


Latina Fauconier

Partner, Managing Director, Capital Markets Accounting and Advisory Services, PwC US


Follow us

Required fields are marked with an asterisk(*)

By submitting your email address, you acknowledge that you have read the Privacy Statement and that you consent to our processing data in accordance with the Privacy Statement (including international transfers). If you change your mind at any time about wishing to receive the information from us, you can send us an email message using the Contact Us page.