by Ekrem Duman | Jun 19, 2026 | Accounting, US GAAP Revenue & Leases
⚡ TL;DRASC 606 and ASC 340-40 govern the costs of obtaining and fulfilling a contract. Incremental costs of obtaining a contract, such as sales commissions, are capitalised when recoverable and amortised over the period of benefit. Fulfilment costs are capitalised...
by Ekrem Duman | Jun 19, 2026 | Accounting, US GAAP Revenue & Leases
⚡ TL;DRLessor accounting under ASC 842 classifies leases as sales-type, direct financing, or operating. Sales-type and direct financing leases derecognise the asset and recognise a net investment in the lease; operating leases keep the asset on the lessor’s...
by Ekrem Duman | Jun 19, 2026 | Accounting, US GAAP Revenue & Leases
⚡ TL;DRPerformance obligations are the heart of ASC 606 — each distinct promise to transfer a good or service to a customer. Identifying them correctly determines how a contract is unbundled, how the transaction price is allocated, and when revenue is recognised....
by Ekrem Duman | Jun 19, 2026 | Accounting, US GAAP Revenue & Leases
⚡ TL;DRASC 842 is the US GAAP lease standard. It requires lessees to recognise a right-of-use asset and a lease liability for most leases, but retains a dual classification — finance and operating leases — that produces different income statement patterns. This...
by Ekrem Duman | Jun 19, 2026 | Accounting, US GAAP Revenue & Leases
⚡ TL;DRASC 606 is the US GAAP standard for revenue from contracts with customers, applying a five-step model: identify the contract, identify performance obligations, determine the transaction price, allocate it, and recognise revenue as obligations are satisfied....
