ASC

ASC 605-45

Principal Agent Considerations

605 Revenue Recognition

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In brief

IntroductoryRevenuePresentationTransition and effective dates

ASC 605-45 formerly governed whether a company reports revenue gross (as a principal) or net (as an agent), including guidance on shipping and handling costs and reimbursed out-of-pocket expenses. Every paragraph in the subtopic (Sections 05, 15, 45, 50, and 55) has been superseded by ASU No. 2014-09, so the subtopic contains no operative guidance. Gross-versus-net presentation is now determined under the principal-versus-agent (control) guidance in ASC 606-10-55-36 through 55-40.

Key points (5)
  • All paragraphs of ASC 605-45 — including 605-45-05-1 through 05-3, 15-1 through 15-5, 45-1 through 45-23, 50-1 through 50-4, and 55-1 through 55-45 — were superseded by Accounting Standards Update No. 2014-09.
  • Because no operative text remains, ASC 605-45 cannot be cited as authoritative support for gross versus net revenue presentation.
  • The subject matter it addressed (reporting revenue gross as a principal versus net as an agent) is now covered by the control-based principal-versus-agent guidance in ASC 606-10-55-36 through 55-40.
  • Legacy indicator-based analysis (e.g., primary obligor, inventory risk, latitude in establishing price) survives only as nonauthoritative background; ASC 606 replaced the indicator list and reframed the analysis around who controls the specified good or service before transfer.
  • The subtopic remains in the Codification as a shell so that pre-adoption financial statements and cross-references can be traced, and for entities applying legacy GAAP in comparative periods.

For students. Know this subtopic mainly as a signpost: the gross-versus-net question is real and exam-tested, but the answer now comes from ASC 606-10-55-36 through 55-40's control test, not from 605-45's old indicators. The common mistake is quoting legacy factors like "primary obligor" or "inventory risk" as if they were still authoritative rules rather than mere indicators of control.

principal versus agentgross versus net revenue presentationsuperseded guidancecontrol of specified good or serviceshipping and handling costsreimbursed out-of-pocket expenses

Machine-generated study aid for ASC 605-45. Check the source paragraphs below.

605-45-00Status

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605-45-00-1
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Handling Costs Superseded Accounting Standards Update No. 2014-09 05/28/2014
Shipping Costs Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-45-05-1 through 05-3
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-45-15-1 through 15-5
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-45-45-1 through 45-23
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-45-50-1 through 50-4
 Superseded Accounting Standards Update No. 2014-09 05/28/2014
605-45-55-1 through 55-45
 Superseded Accounting Standards Update No. 2014-09 05/28/2014

605-45-05Overview and Background

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605-45-15Scope and Scope Exceptions

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605-45-20Glossary

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605-45-45Other Presentation Matters

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605-45-50Disclosure

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605-45-55Implementation Guidance and Illustrations

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605-45-S00StatusSEC

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605-45-S00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
605-45-S45-1SupersededAccounting Standards Update No. 2016-1105/02/2016
605-45-S99-1SupersededAccounting Standards Update No. 2016-1105/02/2016

605-45-S45Other Presentation MattersSEC

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605-45-S99SEC MaterialsSEC

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