Revenue Recognition in Blue Onion
Revenue Recognition in Blue Onion
In the US, ASC 606 requires GAAP-compliant companies to record revenue adhering to a 5-step process. Revenue can be recognized by following each of the steps below:
- 1
- Identify the contract or contracts with the customer.
- 2
- Identify the contract's specific performance obligations.
- 3
- Determine the transaction price.
- 4
- Allocate the transaction price to performance obligations.
- 5
- Recognize revenue when you've fulfilled each performance obligation. Performance obligations are considered met and revenue is recognized when goods are shipped (not delivered) by default in Blue Onion.
- When items in an order are shipped on different dates (split shipment), revenue for each item is recorded at that item's shipment date.
- Shipping revenue for the full order is recognized at the time of the first shipment.
- In cases of split shipments, there is the potential for disaggregated revenue recognition from an order. More detail about this recording can be found here.
- Refunds are recorded in the period in which they're processed and can be found in the 'At Order' section of the Journal Entries page.
💡 There are some differences in the revenue recognition criteria of ASC 606 and IFRS 15. We encourage all users to review their revenue recognition with certified accountants in their jurisdiction.