ASC 606 Contract Revenue Recognition Analyzer
Analyze contracts under ASC 606 and generate audit-ready revenue recognition documentation
What You Can Do
You can rapidly analyze complex customer contracts to identify embedded performance obligations, determine transaction prices, assess variable consideration and payment terms, and document revenue timing conclusions aligned with ASC 606 requirements. The skill applies the standardized five-step revenue recognition model consistently across your contract portfolio, producing compliance-ready supporting documentation that meets audit expectations and accelerates contract-to-revenue workflows.
Features
systematically work through contract identification, performance obligation assessment, transaction price determination, allocation, and timing recognition
detect and classify distinct goods and services, including implicit warranties, refund obligations, and service components
evaluate fixed consideration, variable consideration, and assess materiality of payment term adjustments
document methodologies for inferring or estimating standalone prices when not directly observable
analyze amendments and their impact on existing performance obligations and revenue timing
generate supporting schedules, sign-off templates, and policy conclusion memos with clear reasoning
apply uniform judgment to comparable contracts across your customer base
quantify and document probability-weighted or expected-value estimates for returns, rebates, and incentives
Example Output
Example 1: Multi-Year SaaS Contract
Contract Summary: $500K three-year software license + implementation + support
Performance Obligations Identified:
- Software license (distinct) — recognize over 3 years
- Implementation services (not distinct, bundled with license) — recognize upfront
- Annual support (distinct) — recognize ratably over 12-month periods
Transaction Price: $500K fixed; no variable consideration identified
Conclusion: $XXK Year 1 (implementation + Year 1 support), $YYK Years 2-3 (annual support)
Example 2: Product Sale with Right of Return
Contract Summary: $100K equipment sale with 60-day return right
Performance Obligation: Equipment delivery
Variable Consideration: Historical return rate 8%; probability-weighted refund estimate = $8K
Transaction Price: $92K revenue recognized at delivery; $8K liability for returns
Conclusion: Audit memo with historical return analysis and management assessment of estimate sufficiency attached.
What's Included
- SKILL.md instruction file with ASC 606 framework and prompt engineering guidance:
- ASC 606 Five-Step Checklist: systematic walkthrough template for contract evaluation
- Contract Analysis Template: structured form capturing contract terms, performance obligations, pricing, and timing conclusions
- Audit Documentation Memo: sign-off template for documenting revenue recognition positions and key judgments
- Variable Consideration Worksheet: framework for probability-weighted or expected-value estimation of refunds, rebates, and contingent payments
Who It's For
- Revenue accountants analyzing customer contracts and preparing revenue recognition conclusions
- External auditors conducting revenue audit procedures and evaluating client revenue recognition positions
- Financial reporting teams documenting revenue recognition policies and evaluating complex arrangements
- Contract managers and sales operations teams assessing contract revenue impact pre-signature
- CFO and accounting leadership preparing revenue recognition training and enforcing portfolio consistency
Best For
- Evaluating new or amended customer contracts before revenue is recorded
- Analyzing multi-year or multi-obligation arrangements requiring componentization
- Documenting variable consideration estimates and assessing historical accuracy
- Preparing audit workpapers and supporting revenue transaction samples
- Reconciling contract terms against system revenue recognition and investigating discrepancies
- Building revenue recognition policy positions for financial statement footnotes
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