{"id":12007,"date":"2018-12-14T14:27:38","date_gmt":"2018-12-14T19:27:38","guid":{"rendered":"https:\/\/foundationsoft.com\/?p=12007"},"modified":"2025-04-25T08:46:59","modified_gmt":"2025-04-25T12:46:59","slug":"contractors-new-revenue-recognition","status":"publish","type":"post","link":"https:\/\/www.foundationsoft.com\/learn\/contractors-new-revenue-recognition\/","title":{"rendered":"The Contractors Guide to New Revenue Recognition: ASC 606"},"content":{"rendered":"<div class=\"clear\"><\/div>\n<div class=\"gdlr-space\" style=\"margin-top: 20px;\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_Is_the_ASC_606_New_Revenue_Recognition_Standard\"><\/span>What Is the ASC 606: New Revenue Recognition Standard?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n<div class=\"wp-block-presto-player-reusable-edit\"><!--presto-player:video_id=28--><figure class=\"wp-block-video presto-block-video  presto-provider-youtube\" style=\"--plyr-color-main: var(--presto-player-highlight-color, #f8c01b); --presto-player-logo-width: 150px; \">\n\t<presto-player \n\t\tpreset='{&quot;id&quot;:1,&quot;name&quot;:&quot;Default&quot;,&quot;slug&quot;:&quot;default&quot;,&quot;icon&quot;:&quot;format-video&quot;,&quot;skin&quot;:&quot;modern&quot;,&quot;play-large&quot;:true,&quot;rewind&quot;:true,&quot;play&quot;:true,&quot;fast-forward&quot;:true,&quot;progress&quot;:true,&quot;current-time&quot;:true,&quot;mute&quot;:true,&quot;volume&quot;:true,&quot;speed&quot;:false,&quot;pip&quot;:false,&quot;fullscreen&quot;:true,&quot;captions&quot;:false,&quot;reset_on_end&quot;:true,&quot;auto_hide&quot;:true,&quot;captions_enabled&quot;:false,&quot;save_player_position&quot;:true,&quot;sticky_scroll&quot;:false,&quot;sticky_scroll_position&quot;:&quot;bottom right&quot;,&quot;on_video_end&quot;:&quot;select&quot;,&quot;play_video_viewport&quot;:false,&quot;hide_youtube&quot;:false,&quot;lazy_load_youtube&quot;:false,&quot;hide_logo&quot;:false,&quot;border_radius&quot;:0,&quot;caption_style&quot;:&quot;&quot;,&quot;caption_background&quot;:&quot;&quot;,&quot;is_locked&quot;:true,&quot;cta&quot;:[&quot;&quot;],&quot;watermark&quot;:[&quot;&quot;],&quot;search&quot;:[&quot;&quot;],&quot;email_collection&quot;:[&quot;&quot;],&quot;action_bar&quot;:[&quot;&quot;],&quot;created_by&quot;:49,&quot;created_at&quot;:&quot;2023-11-22 06:36:48&quot;,&quot;updated_at&quot;:&quot;2023-11-22 06:36:48&quot;,&quot;deleted_at&quot;:&quot;&quot;,&quot;show_time_elapsed&quot;:false}'\n\t\tbranding='{&quot;logo&quot;:&quot;&quot;,&quot;color&quot;:&quot;#f8c01b&quot;,&quot;logo_width&quot;:150,&quot;player_css&quot;:&quot;&quot;}'\n\t\tchapters='[]'\n\t\toverlays='[]'\n\t\ttracks='[]'\n\t\tblock-attributes='{&quot;playsInline&quot;:true,&quot;id&quot;:28,&quot;src&quot;:&quot;https:\\\/\\\/www.youtube.com\\\/watch?v=RK-DvrPuYEw&quot;,&quot;preset&quot;:1,&quot;video_id&quot;:&quot;RK-DvrPuYEw&quot;,&quot;visibility&quot;:&quot;public&quot;,&quot;color&quot;:&quot;#00b3ff&quot;,&quot;mutedPreview&quot;:{&quot;enabled&quot;:false,&quot;captions&quot;:false},&quot;mutedOverlay&quot;:{&quot;enabled&quot;:false,&quot;src&quot;:&quot;&quot;,&quot;width&quot;:200,&quot;focalPoint&quot;:{&quot;x&quot;:0.5,&quot;y&quot;:0.5}},&quot;mutedOverlayType&quot;:&quot;text&quot;,&quot;mutedOverlayText&quot;:&quot;Click to play&quot;,&quot;mutedOverlayImageWidth&quot;:200,&quot;chapters&quot;:[],&quot;overlays&quot;:[],&quot;tracks&quot;:[],&quot;openPopupId&quot;:&quot;&quot;,&quot;title&quot;:&quot;What Is the ASC 606: New Revenue Recognition?&quot;}'\n\t\tanalytics=''\n\t\tautomations\t\tprovider='youtube'\n\t\t\t\tid=\"presto-player-1\"\n\t\tsrc=\"\/\/www.youtube.com\/embed\/RK-DvrPuYEw?iv_load_policy=3&amp;modestbranding=1&amp;playinline=1&amp;showinfo=0&amp;rel=0&amp;enablejsapi=1\"\n\t\tmedia-title=\"What Is the ASC 606: New Revenue Recognition?\"\n\t\tcss=\"\"\n\t\tclass=\"presto-video-id-28 presto-preset-id-1 skin-modern\"\n\t\tskin=\"modern\" \n\t\ticon-url=\"https:\/\/www.foundationsoft.com\/wp-content\/plugins\/presto-player\/img\/sprite.svg\" \n\t\tpreload=\"\" \n\t\tposter=\"\"\n\t\tyoutube=\"{&quot;noCookie&quot;:false,&quot;channelId&quot;:&quot;&quot;,&quot;show_count&quot;:false}\"\n\t\tprovider-video-id=\"RK-DvrPuYEw\"\n\t\tvideo-id=\"28\"\n\t\t\t\tplaysinline \n\t\t\t\t>\n\t\t\n    <div class=\"presto-iframe-fallback-container\">\n        <iframe style=\"width: 100%\" title=\"Youtube Video\" class=\"presto-fallback-iframe\" id=\"presto-iframe-fallback-1\" data-src=\"https:\/\/www.youtube.com\/embed\/RK-DvrPuYEw?iv_load_policy=3&amp;modestbranding=1&amp;playsinline=1&amp;showinfo=0&amp;rel=0&amp;enablejsapi=1\" allowfullscreen allowtransparency allow=\"autoplay\"><\/iframe>\n    <\/div>\n\n\t<\/presto-player>\n<\/figure><\/div>\n\n<div class=\"clear\"><\/div>\n<div class=\"gdlr-space\" style=\"margin-top: 20px;\"><\/div>\n<p>As of reporting periods beginning December 2018, there\u2019s a new standard in town. This provides contractors with guidance on when exactly to report the <a href=\"https:\/\/www.foundationsoft.com\/learn\/cash-vs-accrual-accounting\/\">income<\/a> they earn. Before, contractors had industry-specific guidance for how to count and report their cash\u00a0under U.S. generally accepted accounting principles (GAAP). Taking their place is Accounting Standards Codification (ASC) 606, <em>Revenue from Contracts with Customers<\/em>, which introduces the new \u201cfive-step model.\u201d<\/p>\n<p>ASC 606 takes effect for public organizations on <a href=\"https:\/\/fasb.org\/page\/PageContent?pageId=\/projects\/recentlycompleted\/revenue-recognition-summary.html\">December 15, 2017<\/a>. &#8220;Public organizations&#8221; in this context is any of the following:<\/p>\n<ul>\n<li>A public business organization<\/li>\n<li>A not-for-profit organization that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market<\/li>\n<li>An employee benefit plan that files or furnishes financial statements to the U.S. Securities and Exchange Commission.<\/li>\n<\/ul>\n<p>For nonpublic and not-for-profit companies, ASC 606 takes effect on December 15, 2018.<\/p>\n<a target=\"_blank\" href=\"\/job-costing-ultimate-guide\/\" class=\"blog-cta-image\"><img decoding=\"async\" src=\"\/wp-content\/uploads\/2024\/03\/FSL-blog-post-ad-ultimate-guide.png\" alt=\"UG to Job Costing\" title=\"UG to Job Costing\"><\/a>\n<h3><span class=\"ez-toc-section\" id=\"Why_ASC_606\"><\/span>Why ASC 606?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In short, different industries and countries occasionally have had different guidance on how to record income, even on similar transactions. The Financial Accounting Standards Board (FASB) worked with its international counterpart to create a more consistent set of principles and put everyone on the same page.<\/p>\n<p>This includes GAAP-reporting construction contractors.<\/p>\n<div  class=\"x-column x-sm x-3-5\" style=\"\" >\n<h3><span class=\"ez-toc-section\" id=\"Whats_the_Core_Idea_of_the_New_Standards\"><\/span>What\u2019s the Core Idea of the New Standards?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In construction, companies previously reported on the basis of contracts. Very small contractors can report revenue on a \u201c<a href=\"\/learn\/cash-vs-accrual-accounting\/\">cash basis<\/a>.\u201d However, most have used either the <a href=\"\/learn\/construction-accounting-glossary\/#completedcontract\">completed contract method<\/a>\u00a0(CCM) generally for shorter-term contracts or the <a href=\"\/learn\/construction-accounting-glossary\/#poc\">percentage of completion method<\/a>\u00a0(PCM) for contracts that unfold more over time.<br \/>\n<\/div>\n<div  class=\"x-column x-sm x-2-5 last\" style=\"\" >\n<div class=\"gdlr-shortcode-wrapper\">\n<div class=\"gdlr-box-with-icon-ux gdlr-ux\"><a href=\"\"><\/a><\/p>\n<div class=\"gdlr-item gdlr-box-with-icon-item pos-top type-circle\" >\n<div class=\"box-with-circle-icon\" style=\"background-color: #7abc43\"><i class=\"fa icon-gears\"  style=\"color:#ffffff;\" ><\/i><\/div>\n<h2 class=\"box-with-icon-title\"><span class=\"ez-toc-section\" id=\"Performance_Obligation\"><\/span>Performance Obligation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"clear\"><\/div>\n<div class=\"box-with-icon-caption\">\n<p style=\"text-align: left;\">A promise in a contract with a customer to transfer to the customer either:<br \/>\n<em>(a)<\/em> a good or service (or a bundle of goods or services) that is distinct<br \/>\n<em>(b)<\/em> a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer.<br \/>\n<strong><em><br \/>\n\u2014 ASC Master Glossary<\/em><\/strong> <\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<hr  class=\"x-clear\" >\n<p>ASC 606 is based instead on the delivery of promised goods or services to the customer. The important new term for this is \u201c<strong>performance obligation<\/strong>,\u201d which isn\u2019t necessarily the same as a single contract. A performance obligation is most simply a contracted promise to provide a good or service.<\/p>\n<p>Under the new rules, the key takeaway is that construction businesses need to use ASC guidance to <em>identify <\/em>each performance obligation and the\u00a0most appropriate way to account for its revenue as it\u2019s delivered.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_Five-Step_Revenue_Model\"><\/span>The Five-Step Revenue Model<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In place of previous guidance on revenue reporting for construction contracts, ASC 606 instructs contractors to use a five-step process:<\/p>\n<table class=\"style-2\">\n<tbody>\n<tr>\n<th>FIVE-STEP MODEL FOR ASC 606<\/th>\n<\/tr>\n<tr>\n<td>1. Identify the contract with a customer.<\/td>\n<\/tr>\n<tr>\n<td>2. Identify the performance obligations.<\/td>\n<\/tr>\n<tr>\n<td>3. Determine the transaction price.<\/td>\n<\/tr>\n<tr>\n<td>4. Allocate the price to the performance obligations.<\/td>\n<\/tr>\n<tr>\n<td>5. Recognize revenue with the satisfied performance obligation.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div class=\"clear\"><\/div>\n<div class=\"gdlr-space\" style=\"margin-top: 20px;\"><\/div>\n<h3><span class=\"ez-toc-section\" id=\"1_Identify_the_Contract_with_a_Customer\"><\/span>1. Identify the Contract with a Customer<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Before anything else, contractors must account for all the legal agreements from which they expect to collect money.<\/p>\n<p>This might not always be as easy as it sounds. First, construction contracts can traditionally involve multiple parties. Second, contractors may also have multiple simultaneous contracts with the same customer. Under ASC 606, companies may need to consider these as one contact or segment them when there are multiple performance obligations.<\/p>\n<p>Similarly, for revenue recognition purposes, contractors may consider change orders part of an existing contract or a new contract. It depends on whether they&#8217;re pricing and selling the change as a new, distinct performance obligation.<\/p>\n<p>That said, the next step is to identify what exactly the contracted performance obligations are.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_Identify_the_Performance_Obligations\"><\/span>2. Identify the Performance Obligations<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Remember, a contract and a performance obligation aren\u2019t necessarily the same. Of course, each contract is based on at least one performance obligation \u2014 but it may have more.<\/p>\n<p>For example, a customer might contract a business to renovate an apartment building and expand its parking lot. This could be two performance obligations under one contract. In contrast, construction for several series of townhomes might be a single performance obligation.<\/p>\n<div style=\"padding: 10px;\">\n<div class=\"gdlr-shortcode-wrapper\">\n<div class=\"gdlr-box-with-icon-ux gdlr-ux\"><a href=\"\"><\/a><\/p>\n<div class=\"gdlr-item gdlr-box-with-icon-item pos-left type-circle\" >\n<div class=\"box-with-circle-icon\" style=\"background-color: #7abc43\"><i class=\"fa icon-gears\"  style=\"color:#ffffff;\" ><\/i><\/div>\n<h2 class=\"box-with-icon-title\"><span class=\"ez-toc-section\" id=\"Whats_a_Distinct_Performance_Obligation\"><\/span>What&#8217;s a <em>Distinct<\/em> Performance Obligation?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"clear\"><\/div>\n<div class=\"box-with-icon-caption\">\n<p style=\"text-align: left; padding: 0px 0px 0px 6px;\">A business is likely to consider a good or service one <em>distinct<\/em> performance obligation if:<\/p>\n<p style=\"text-align: left; padding-left: 30px;\">(a) the customer can benefit from the good or service on its own \u2014 plus they can identify a separate promise of delivery in the contract<\/p>\n<p style=\"text-align: left; padding-left: 30px;\">(b) or, as a series of goods or services, they\u2019re substantially the same and have the same pattern of delivery<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"clear\"><\/div>\n<div class=\"gdlr-space\" style=\"margin-top: 10px;\"><\/div>\n<p>In other words, the contractor can satisfy a performance obligation by completing the parking lot, independent of the apartment renovation. And vice versa. In contrast, just running the new electrical <em>wouldn\u2019t<\/em> be a distinct performance obligation. That\u2019s because the contractor can\u2019t separate it from their contracted obligations to also install new HVAC, complete finishing work, etc. \u2014 it\u2019s all an essential part of the whole reno job.<\/p>\n<p>Let\u2019s look at our second example. Each row of townhomes might also seem distinct; any one structure isn\u2019t dependent upon completion of another. However, it actually illustrates a case of a series of goods that are substantially the same. They\u2019d be a single performance obligation when contracted together as one uniform development project. They might complete at different times, but the pattern of delivery would be the same.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_Determine_the_Transaction_Price\"><\/span>3. Determine the Transaction Price<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Here, the transaction is the contract, so the \u201ctransaction price\u201d is what the customer pays for the contracted goods and services.<\/p>\n<p>A contractor might easily identify a contract\u2019s expected revenue, but it may also involve a little math. This is the case when <strong>variable consideration <\/strong>is involved in the contract \u2014 such as incentives and penalties, pending change orders, and unit price contracts. As under past guidance, how businesses account for these variables depends on an assessment of the most probable final price.<\/p>\n<p>The determined transaction price will also factor in the impact of any significant financing. If the contractor provides significant financing to the customer, they might record less contract revenue and more income on interest. If the contractor is significantly financed by the customer, they might record more project revenue along with an interest expense.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_Allocate_the_Price\"><\/span>4. Allocate the Price<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Since contractors have already identified the relationship of their contracts to separate performance obligations, they can now allocate the transaction price to each performance obligation contained in that contract. The ASC 606 guidance has contractors do this based on the \u201crelative standalone prices of each distinct good or service.\u201d This is estimated as if the good or service were being sold separately.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"5_Recognize_Revenue\"><\/span>5. Recognize Revenue<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finally, contractors will only record income based upon satisfying the performance obligation. That doesn\u2019t mean, however, that you can never count revenue until the entire performance obligation is complete. For example, what about those series of townhomes? The contractor looks at an important consideration called <strong>\u201ctransfer of control<\/strong>.\u201d<\/p>\n<p>Control is transferred when the contractor\u2019s work becomes the customer\u2019s to own. The language of the contract helps to determine <em>when <\/em>exactly this happens. For ASC 606, transfer of control happens either <em>over time <\/em>or at a single <em>point in time<\/em>.<\/p>\n<div class=\"clear\"><\/div>\n<div class=\"gdlr-space\" style=\"margin-top: 20px;\"><\/div>\n<div class=\"gdlr-shortcode-wrapper gdlr-row-shortcode\">\n<div class=\"clear\"><\/div>\n<\/div>\n<div  class=\"x-column x-sm x-1-2\" style=\"\" >\n<div class=\"gdlr-shortcode-wrapper\">\n<div class=\"gdlr-box-with-icon-ux gdlr-ux\"><a href=\"\"><\/a><\/p>\n<div class=\"gdlr-item gdlr-box-with-icon-item pos-top type-circle\" >\n<div class=\"box-with-circle-icon\" style=\"background-color: #fbc018\"><i class=\"fa icon-dashboard\"  style=\"color:#ffffff;\" ><\/i><\/div>\n<h2 class=\"box-with-icon-title\">Over Time<\/h2>\n<div class=\"clear\"><\/div>\n<div class=\"box-with-icon-caption\">\n<p style=\"text-align: left;\"><strong>Transfer over time<\/strong> typically occurs when a customer has title and ongoing use and benefit from the progress. If a building is on the customer\u2019s land, the foundation might transfer to their control once it\u2019s poured. It might not be a complete\u00a0<em>performance obligation<\/em>, but because the customer can sell the raw value of the uncompleted building, they have use and benefit.<\/p>\n<p style=\"text-align: left;\">Since the customer is getting use and benefit from the contractor\u2019s production, the contractor has a right to payment\u00a0<em>as <\/em>the performance obligation is being satisfied at various stages\u00a0\u2014 not just at the end when it\u2019s satisfied. Similar to PCM methods, the contractor records revenue at each point when they have a right to collect income.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div  class=\"x-column x-sm x-1-2 last\" style=\"\" >\n<div class=\"gdlr-shortcode-wrapper\">\n<div class=\"gdlr-box-with-icon-ux gdlr-ux\"><a href=\"\"><\/a><\/p>\n<div class=\"gdlr-item gdlr-box-with-icon-item pos-top type-circle\" >\n<div class=\"box-with-circle-icon\" style=\"background-color: #fbc018\"><i class=\"fa icon-flag-alt\"  style=\"color:#ffffff;\" ><\/i><\/div>\n<h2 class=\"box-with-icon-title\">Point-in-Time<\/h2>\n<div class=\"clear\"><\/div>\n<div class=\"box-with-icon-caption\">\n<p style=\"text-align: left;\">In contrast, <strong>point-in-time transfer<\/strong> occurs all at once. Up until that point, the contractor has physical possession, legal title, and use and benefit. Let\u2019s say a developer is building our example townhouses to sell to a leasing company. In that case, transfer of control might not occur until the paint dries and they hand over the deeds.<\/p>\n<p style=\"text-align: left;\">Subject to their agreement with the customer, the contractor wouldn\u2019t have a right to collect until the performance obligation is fully satisfied by transferring control. Therefore, like under a completed-contract method, they would record all revenue from the performance obligation at one time, at the end.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<hr  class=\"x-clear\" >\n<a target=\"_blank\" href=\"\/learn\/#schedule-a-live-demo\" class=\"blog-cta-image\"><img decoding=\"async\" src=\"\/wp-content\/uploads\/2024\/03\/FSL-blog-post-ad-see-how.png\" alt=\"Get a Demo\" title=\"Get a Demo\"><\/a>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>No overview of the ASC 606 revenue recognition standards will be a complete standalone authority. There are plenty of more detailed considerations contractors need to account for. However, a foundational overview hopefully gives you the basic framework and language for critical conversations with <a href=\"\/construction-cpa\/\">your construction CPA<\/a>.<\/p>\n<p>Are you concerned about your accounting software being up to the task for revenue recognition requirements? Take an online tour of our <a href=\"\/software\/\">ASC 606-compliant construction accounting software<\/a>\u00a0with a video demo!<\/p>\n<div id=\"for-more-box\">\n<p><a class=\"gdlr-button medium\" href=\"\/learn\/construction-accounting-101\/\" target=\"_self\"  style=\"color:#ffffff; background-color:#000000; border-color:#999999; \"  >Up Next: Construction Accounting 101: A Basic Guide for Contractors \u00bb<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>There\u2019s a new revenue standard in town. Taking effect is Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, which introduces the new \u201cfive-step model.\u201d See what that means for you.<\/p>\n","protected":false},"author":17,"featured_media":1679,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_searchwp_excluded":"","inline_featured_image":false,"footnotes":""},"categories":[9,16],"tags":[11,28,20],"class_list":["post-12007","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-reporting-bookkeeping","tag-construction-reporting","tag-featured","tag-video"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Contractors Guide to New Revenue Recognition: ASC 606<\/title>\n<meta name=\"description\" content=\"See the five-step approach of the new Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, and what it means for you.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.foundationsoft.com\/learn\/contractors-new-revenue-recognition\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Contractors Guide to New Revenue Recognition\" \/>\n<meta property=\"og:description\" content=\"There\u2019s a new revenue standard in town. Taking effect is Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, which introduces the new \u201cfive-step model.\u201d See what that means for you.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.foundationsoft.com\/learn\/contractors-new-revenue-recognition\/\" \/>\n<meta property=\"og:site_name\" content=\"Foundation Software\" \/>\n<meta property=\"article:published_time\" content=\"2018-12-14T19:27:38+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-04-25T12:46:59+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.foundationsoft.com\/wp-content\/uploads\/2023\/05\/Foundation-Software.png\" \/>\n\t<meta property=\"og:image:width\" content=\"600\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Frank Osborn\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"The Contractors Guide to New Revenue Recognition\" \/>\n<meta name=\"twitter:description\" content=\"There\u2019s a new revenue standard in town. 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