Revenue Recognition – ASC 606 Roundup: 5/18/2018

This week’s roundup focuses on 10-Q’s submitted during the week of 5/14/18.

To quickly identify ASC 606 information in the below links, click on the link, hit Control + F, enter the text “606”, and click the down arrow button.

Let us know what you think as we will tailor future weekly roundups to the most relevant, timely, content based on feedback from you, and as always, feel free to reach out to us to learn more about SOFTRAX and the value we can provide for your company’s ASC 606 adoption!



  • This filing explains why sales and marketing expenses were lower upon the adoption of ASC 606 than what would have been the case under ASC 605.
  • Pages 8 and 9 provide details on ASC 606’s impact on the company’s financial results.

Our thoughts:  With over 21 references to ASC 606 throughout the filing, it provides a thorough representation of how ASC 606 was implemented and its impact on the company’s financial results with before and after representations.



  • Page 6 explains how the company was impacted by ASC 606 in the “Revenue from Contracts with Customers” section.
  • Pages 8 through 10, the “Note 3. Revenue Recognition” section, provide two versions of how the company disaggregated its revenue. One approach was “disaggregation of revenue by nature” on Page 8, while page 10 presented a disaggregation of revenue by product and region.
  • Page 9 provides information on how the variable consideration requirement of ASC 606 was handled by the company.

Our thoughts:  Good narrative on implementation and impacts of ASC 606.  Notable references to how the variable consideration requirements of ASC 606 will allow the company to recognize revenue earlier than what would have been the case under ASC 605.



  • The bottom of page 11 offers a unique qualitative presentation, in a columnar format, of how commissions were treated differently across the company’s subsidiaries, related third parties, and independent bottlers. Essentially, the company provided the “key” for reference in upcoming sections where its treatment of commissions was discussed.
  • Page 12 details how the company disaggregated revenue by “geographical markets and reportable segments” as well as a “Contract Liabilities” section.
  • Of note, an explanation of how the company treated commissions paid to distributors under 606, versus how these were handled in 605, was provided. This illustrated how such commissions were treated as a reduction to net sales in ASC 606.  Additional information on this topic also appears on page 35.

Our thoughts:  With over 27 references to ASC 606 throughout the filing, and the detail the company provided for all such references, it’s clear the company spent time analyzing how ASC 606 would impact its business.  The detail offered on how commissions were treated for its various paths of sales activities (subsidiaries, 3rd parties, and independent bottlers) will be useful for companies that have similar business models.



  • Page 8 provides a summary of ASC 606’s impact on the company’s results with an introduction section and then a section named “Impact on Previously Reported Results”.  The company is declarative in this section with the statement, “The provisions of ASC Topic 606 had a material impact on the timing and amount of revenues recognized by the Company.”  This section is worth a review due to its presentation of quantitative information along with the “story” in terms of ASC 606’s impact.
  • Page 13’s “Practical Expedients Elected” section explains why the company elected the “As-Invoiced” and “Directly allocable variable consideration to wholly unsatisfied performance obligations exemption” with detail supporting these elections.

Our thoughts:  This is an example of a company that adopted ASC 606 using the full retrospective method which has not been as frequent in filings in comparison to companies that adopted using the modified retrospective method.  Additionally, the “Practical Expedients Elected” section is a good example to reference.


ASC 606 is not a challenge your company has to face settling for limited functionality in existing systems or through high-risk manual efforts.  SOFTRAX provides superior experience, knowledge, products, and services to address your company’s ASC 606 needs.

We encourage you to contact us to learn more about SOFTRAX and the value we can provide for your company’s ASC 606 adoption.

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