ASC 605-50
Customer Payments and Incentives
605 Revenue Recognition
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ASC 605-50 was the legacy guidance on a vendor's accounting for consideration given to a customer or a reseller of the vendor's products (cash, credits, coupons, slotting fees, rebates, and similar sales incentives), including whether such consideration is a reduction of revenue or an expense and when to recognize it. Every paragraph in the subtopic — Sections 05, 15, 25, 45, 50, 55, and 60 — has been superseded by ASU 2014-09 (Revenue from Contracts with Customers). No operative guidance remains here; the topic is retained only as a historical marker for entities referencing pre-ASC 606 literature.
Key points (5)
- Every paragraph of 605-50 (605-50-05-1 through 605-50-60-1) is marked 'Paragraph superseded by Accounting Standards Update No. 2014-09,' so the subtopic contains no effective guidance.
- Consideration payable to a customer — cash, credit, coupons, vouchers, and other sales incentives — is now addressed by ASC 606-10-32-25 through 32-27, which generally requires such amounts to reduce the transaction price unless paid for a distinct good or service.
- The old default presumption that vendor consideration to a reseller is a reduction of revenue (rather than a cost) and the related exceptions no longer exist as separate guidance; the 606 'distinct good or service' analysis replaces it.
- Costs of obtaining and fulfilling a contract that were formerly analyzed alongside incentives are now covered by ASC 340-40.
- Entities may still consult superseded 605-50 text only for periods before adoption of ASC 606 or for comparative-period reporting under the transition guidance in ASC 606-10-65-1.
For students. Do not cite 605-50 as live GAAP — it is entirely superseded; the exam answer for customer incentives, coupons, rebates, and slotting fees is ASC 606-10-32-25 through 32-27. The common mistake is assuming the old bright-line presumption (incentives reduce revenue unless an identifiable benefit plus fair value can be shown) still controls, when ASC 606 instead asks whether the payment is for a distinct good or service.
Machine-generated study aid for ASC 605-50. Check the source paragraphs below.
605-50-00Status
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605-50-05Overview and Background
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605-50-15Scope and Scope Exceptions
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605-50-20Glossary
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605-50-25Recognition
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605-50-45Other Presentation Matters
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605-50-50Disclosure
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605-50-55Implementation Guidance and Illustrations
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605-50-60Relationships
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605-50-S00StatusSEC
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| Paragraph | Action | Accounting Standards Update | Date |
| 605-50-S45-1 | Superseded | Accounting Standards Update No. 2016-11 | 05/02/2016 |
| 605-50-S99-1 | Superseded | Accounting Standards Update No. 2016-11 | 05/02/2016 |
605-50-S45Other Presentation MattersSEC
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605-50-S99SEC MaterialsSEC
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