ASC

ASC 605-15

Products

605 Revenue Recognition

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In brief

IntermediateRevenueTransition and effective datesRecognition

ASC 605-15 was the legacy guidance on revenue recognition for sales of product, most notably sales with a right of return (and related product financing and industry arrangements). Every paragraph in the subtopic — background, scope, recognition, and presentation — has been superseded by ASU 2014-09, which replaced it with the revenue model in ASC 606. As a result, the subtopic contains no operative guidance today and exists only as a historical marker.

Key points (5)
  • All of Sections 05, 15, 25, and 45 of ASC 605-15 are superseded by Accounting Standards Update No. 2014-09 (see 605-15-05-1 through 05-7, 15-1 through 15-4, 25-1 through 25-5, and 45-1).
  • Because no paragraph remains operative, ASC 605-15 imposes no recognition, measurement, or presentation requirements for product sales.
  • Revenue from sales of products, including arrangements with a right of return, is now accounted for under ASC 606, with returns treated as variable consideration and a refund liability.
  • Costs of obtaining or fulfilling a contract formerly addressed alongside legacy revenue guidance are now in ASC 340-40.
  • Entities that have adopted ASU 2014-09 must not apply the superseded 605-15 criteria (such as the former reasonable-estimate-of-returns conditions) to recognize product revenue.

For students. This subtopic is a shell: its only content is the notation that ASU 2014-09 superseded it, so any exam question about product sales or rights of return should be answered under ASC 606. The common mistake is citing the old 605-15 "reasonable estimate of returns" conditions instead of ASC 606's variable consideration and refund liability model.

superseded guidancesales with a right of returnproduct revenue recognitionrevenue from contracts with customersvariable considerationrefund liability

Machine-generated study aid for ASC 605-15. Check the source paragraphs below.

605-15-00Status

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605-15-00-1
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Warranty Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-15-05-1 through 05-7
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-15-15-1 through 15-4
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-15-25-1 through 25-5
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-15-45-1 Superseded Accounting Standards Update No. 2014-09 05/28/2014

605-15-05Overview and Background

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605-15-15Scope and Scope Exceptions

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605-15-20Glossary

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605-15-25Recognition

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605-15-45Other Presentation Matters

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605-15-S00StatusSEC

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605-15-S20GlossarySEC

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605-15-S25RecognitionSEC

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605-15-S45Other Presentation MattersSEC

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605-15-S50DisclosureSEC

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605-15-S99SEC MaterialsSEC

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