- Construction contractors should be aware of a number of other unique accounting and reporting items that may or may not differ from existing guidance under U.S. GAAP.
- ASC 606 requires additional consideration and documentation related to the transfer of control, including whether the transfer of control occurs over time or at a point in time.
- The new standard requires additional consideration and documentation of the standalone selling price or when the standalone selling price is not observable, when variable consideration is part of the transaction price, and when there are changes in the transaction price after contract inception.
- Variable consideration can be allocated to all of the performance obligations based on the relative standalone selling price or only to specific performance obligations depending on its relevance to a specific performance obligation.
- When contracts include variable consideration, it is possible that changes in the transaction price can arise after a modification, and such changes may or may not be related to performance obligations that existed before the modification.
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