Revenue Recognition Checklist
Sales & Revenue Operations
Quick Answer
Describe your business model and contract types. Paste into Claude or ChatGPT. Get a customized ASC 606 revenue recognition checklist with common issues and red flags for your specific situation.
What You Get
A customized revenue recognition checklist covering the ASC 606 5-step framework applied to your business, common recognition issues for your contract types, red flags that trigger restatement risk, and a monthly recognition review process.
Who Is This For
Controllers and finance managers implementing ASC 606 revenue recognition, auditors reviewing revenue recognition policies, and startup CFOs preparing for their first audit.
About This Template
Revenue recognition errors are one of the most common sources of audit adjustments and restatements for growing companies. ASC 606 requires a 5-step framework for determining when and how much revenue to recognize. This template guides finance teams through describing their business model and contract types, then uses AI to produce a customized revenue recognition checklist covering the 5-step framework, common recognition issues for their specific business, and red flags that trigger recognition scrutiny.
Fill In Your Details
Your company name
e.g. B2B SaaS subscription, professional services, software plus implementation, usage-based pricing
e.g. annual subscription contracts, multi-year contracts with upfront payment, project-based SOWs, usage-based monthly billing
e.g. 12-month subscription at $18,000 plus $5,000 onboarding fee paid upfront
Any revenue recognition questions you already have e.g. when to recognize the onboarding fee, how to handle contract modifications
e.g. ASC 606 (US GAAP) or IFRS 15
Gather these details then use them to fill in the prompt below.
AI Prompts
Generate revenue recognition checklist
Paste this prompt into Claude or ChatGPT with your business details filled in.
You are a revenue recognition specialist helping a company implement correct revenue recognition practices. Using the information below, produce a customized revenue recognition checklist. Company: [company_name] Business model: [business_model] Contract types: [contract_types] Typical deal: [typical_deal] Known issues: [recognition_issues] Accounting standard: [accounting_standard] Produce: 1. ASC 606 Five-Step Framework Applied — walk through each step for the typical deal described 2. Performance Obligations Identification — list all performance obligations in a typical contract 3. Transaction Price Allocation — how to allocate price across multiple performance obligations 4. Recognition Timing — when each performance obligation is satisfied and revenue recognized 5. Common Recognition Issues — the top 5 recognition errors for this specific business model 6. Red Flags — contract terms or deal structures that would trigger recognition complexity 7. Monthly Recognition Checklist — specific steps to take each month to ensure correct recognition Note: this is educational guidance. Consult with your auditors and accounting advisors for final revenue recognition policies. This does not constitute accounting advice.
Sample Output
This is an example of what AI produces when you use this template.
Performance Obligations in Typical Deal
For a deal structured as $18,000 annual subscription plus $5,000 onboarding fee: there are likely two distinct performance obligations. Performance Obligation 1: SaaS subscription access — delivered over time (12 months), recognized ratably at $1,500 per month. Performance Obligation 2: Onboarding and implementation services — the key question is whether this is a distinct service or a setup activity required to access the subscription. If the customer could purchase the subscription without onboarding, it is likely distinct. If the software is not usable without the onboarding, it may be combined with the subscription. This determination significantly affects timing: distinct onboarding recognized as delivered, combined onboarding recognized ratably with subscription.
Monthly Recognition Checklist
Month-end revenue recognition review: 1. List all new contracts signed this month — identify all performance obligations in each 2. Confirm subscription revenue equals active contracts multiplied by monthly rate — no exceptions 3. Review all professional services SOWs — confirm % complete estimate is documented and approved 4. Identify any contract modifications (upsells, downgrades, cancellations) — each requires recognition reassessment 5. Check for any upfront payments — confirm deferred revenue balance is correct 6. Review any multi-element arrangements for SSP (standalone selling price) documentation 7. Confirm no revenue was recognized before contract was fully executed and countersigned