ASC 605-28
Milestone Method
605 Revenue Recognition
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ASC 605-28 formerly provided the "milestone method" of revenue recognition, an accounting policy election that allowed a vendor in a research-and-development arrangement to recognize contingent milestone consideration in its entirety in the period the milestone was achieved, if the milestone was deemed substantive. Every paragraph of this subtopic — scope, recognition, disclosure, and transition — was superseded by ASU 2014-09 (Revenue from Contracts with Customers). Milestone-type contingent consideration is now accounted for as variable consideration under ASC 606, subject to the constraint on variable consideration.
Key points (5)
- Every paragraph of ASC 605-28 (605-28-05-1, 15-1 through 15-4, 25-1 through 25-3, 50-1, 50-2, and 65-1) was superseded by Accounting Standards Update No. 2014-09.
- Because the subtopic contains no operative guidance, the milestone method is no longer an available accounting policy for entities that have adopted ASC 606.
- Consideration contingent on achieving a milestone is now evaluated as variable consideration under ASC 606-10-32-5 through 32-14, including the constraint on estimates of variable consideration.
- The subtopic remains in the Codification only as a historical shell; researchers should treat it as superseded legacy GAAP and look to ASC 606 and ASC 340-40 instead.
- Legacy financial statements or comparative periods prepared before ASC 606 adoption may still reflect milestone method policy elections and the related disclosures formerly required by 605-28-50.
For students. Know this subtopic mainly as a dead letter: the milestone method was eliminated by ASU 2014-09, so exam answers about milestone payments should apply ASC 606's variable consideration and constraint analysis. The common mistake is assuming milestone payments can still be recognized in full when achieved simply because the milestone is "substantive."
Machine-generated study aid for ASC 605-28. Check the source paragraphs below.
605-28-00Status
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| Paragraph | Action | Accounting Standards Update | Date |
| Milestone (2nd def.) | Superseded | Accounting Standards Update No. 2014-09 | 05/28/2014 |
| Milestone | Added | Accounting Standards Update No. 2010-17 | 04/28/2010 |
| 605-28-05-1 | Superseded | Accounting Standards Update No. 2014-09 | 05/28/2014 |
| 605-28-05-1 | Added | Accounting Standards Update No. 2010-17 | 04/28/2010 |
| Superseded | Accounting Standards Update No. 2014-09 | 05/28/2014 | |
| Added | Accounting Standards Update No. 2010-17 | 04/28/2010 | |
| Superseded | Accounting Standards Update No. 2014-09 | 05/28/2014 | |
| Added | Accounting Standards Update No. 2010-17 | 04/28/2010 | |
| 605-28-50-1 | Superseded | Accounting Standards Update No. 2014-09 | 05/28/2014 |
| 605-28-50-1 | Added | Accounting Standards Update No. 2010-17 | 04/28/2010 |
| 605-28-50-2 | Superseded | Accounting Standards Update No. 2014-09 | 05/28/2014 |
| 605-28-50-2 | Added | Accounting Standards Update No. 2010-17 | 04/28/2010 |
| 605-28-65-1 | Added | Accounting Standards Update No. 2010-17 | 04/28/2010 |
605-28-05Overview and Background
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605-28-15Scope and Scope Exceptions
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605-28-25Recognition
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605-28-50Disclosure
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605-28-65Transition and Open Effective Date Information
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