PwC's accounting podcast - Identifying the contract – The first step in recognizing revenue

Identifying the contract – The first step in recognizing revenue

07/16/24 • 41 min

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Our revenue miniseries continues with identifying the contract, the first step in the five-step model in the revenue standard. It's important to get this step right to appropriately apply the model for recognizing revenue.
In this episode, we discuss:

4:10 – The five criteria to have a contract with a customer under the revenue standard
8:23 – The impact of master services agreements and enforceable rights
16:03 – Assessing collectibility of the consideration in the contract
27:08 – Determining the contract term

For more information, read chapter 2 of our Revenue guide. Also, to hear more on revenue topics, listen to the first episode in this miniseries, Gross versus net revenue: Is your company the principal or agent?. Additionally, follow this podcast on your favorite podcast app for more episodes.
Mike Coleman is a partner in PwC's National Office with over 30 years of experience. Mike specializes in accounting for revenue and software arrangements and has served technology clients for much of his career. In addition, Mike has represented the firm on the AICPA Software Task Force.
Pat Durbin is a Deputy Chief Accountant in PwC’s National Office. He has over 30 years of experience consulting with our clients and engagement teams on complex accounting matters, including issues related to revenue, compensation, income taxes, and inventory under both US GAAP and IFRS.
Heather Horn is the PwC National Office Sustainability & Thought Leader, responsible for developing our communications strategy and conveying firm positions on accounting, financial reporting, and sustainability matters. In addition, she is part of PwC’s global sustainability leadership team, developing interpretive guidance and consulting with companies as they transition from voluntary to mandatory sustainability reporting. She is also the engaging host of PwC’s quarterly webcast series.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.

4:10 – The five criteria to have a contract with a customer under the revenue standard
8:23 – The impact of master services agreements and enforceable rights
16:03 – Assessing collectibility of the consideration in the contract
27:08 – Determining the contract term

Previous Episode

Becoming nature positive: Integrating strategy and reporting

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Host Heather Horn welcomes back Will Evison, a director in PwC UK’s Global Sustainability, Climate, and Nature Strategy practice, to provide an update on the work of PwC’s Centre for Nature Positive Business and discuss the relationship between nature positive business strategy and reporting.
In this episode, they discuss:

2:18– The purpose and progress of PwC’s Centre for Nature Positive Business
8:57 – The impact of the Corporate Sustainability Reporting Directive adoption on company strategies
10:45 – The importance of nature positive business
12:58 – Nature reporting developments, including those related to the European Sustainability Reporting Standards and the Task Force on Nature Related Financial Disclosures (TNFD)
23:27 – Insights on how companies can combine nature strategy and reporting
28:55 – What’s on the horizon for nature positive business

Interested in more background on measuring and reporting nature and biodiversity? Listen to our previous podcasts in the “Becoming nature positive” series (Committing, measuring and reporting and Strategizing and implementing) and check out PwC’s global nature hub here.
Also, referenced in the podcast, is the Nature Strategy Handbook developed by Business for Nature in collaboration with PwC UK (official partner of the campaign), as well as Managing natures risks: from understanding to action, a follow-up to an earlier analysis of the nature dependence of industries’ direct operations that was carried out by PwC as part of the World Economic Forum’s New Nature Economy Report Series and published in the Nature Risk Rising report in 2020.
Will Evison is a director in PwC UK’s Global Sustainability, Climate, and Nature Strategy practice, specializing in integrating natural and social capital analysis into decision making. With over 18 years’ experience delivering climate and nature-related projects with businesses, investment firms and public sector organizations across more than 20 countries, he also led the development of PwC’s Total Impact Measurement and Management methodologies (TIMM), and now manages PwC’s global TIMM center of excellence. These methodologies utilize predictive analytics, health economics, and wellbeing techniques to model outcomes.
Heather Horn is the PwC National Office Sustainability & Thought Leader, responsible for developing our communications strategy and conveying firm positions on accounting, financial reporting, and sustainability matters. In addition, she is part of PwC’s global sustainability leadership team, developing interpretive guidance and consulting with companies as they transition from voluntary to mandatory sustainability reporting. She is also the engaging host of PwC’s quarterly webcast series.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Next Episode

IFRS financial performance reporting – The new landscape

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This episode provides an overview of the new standard from the International Accounting Standards Board, the IASB. IFRS 18 is the new standard on presentation and disclosure in financial statements, with a focus on updates to the income statement. This is a significant development in IFRS financial reporting - even companies not reporting under IFRS will want to be aware of these updates.
In this episode, we discuss:

1:10 – An overview of the new standard
5:00 – Aggregation and disaggregation (impacting all primary financial statements and notes)
9:00 – Structural changes to the statement of profit or loss
18:25 – Getting started with implementation and the timeline
21:19 – Management-defined performance measures

For more information, read our publication, IFRS 18 is here: redefining financial performance reporting. Additionally, follow this podcast on your favorite podcast app for more episodes.
Gary Berchowitz is the non-financial instruments leader in PwC’s Global Assurance Quality - Corporate Reporting Services group. Gary brings years of financial accounting experience, working to drive quality and connectivity throughout the PwC network and help local teams solve complex accounting issues in a practical way. Gary contributes to the firm’s global view on a variety of financial reporting matters.
Heather Horn is the PwC National Office Sustainability & Thought Leader, responsible for developing our communications strategy and conveying firm positions on accounting, financial reporting, and sustainability matters. In addition, she is part of PwC’s global sustainability leadership team, developing interpretive guidance and consulting with companies as they transition from voluntary to mandatory sustainability reporting. She is also the engaging host of PwC’s quarterly webcast series.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].