# ASC 606-952: Revenue from Contracts with Customers — Franchisors Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/606/952/) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T23:18:34.884Z to 2026-09-09T23:18:51.476Z Record version: sha256:443d8b9825fc1971bced8740c8e2e748652671c08453e0351c061757973bfb0d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 606-952: Revenue from Contracts with Customers — Franchisors ### Machine-generated study aids ```json { "summary": "This subtopic gives franchisors that are not public business entities a practical expedient for identifying performance obligations under Topic 606. Rather than applying the general distinct analysis to the franchise license, a private franchisor may treat listed pre-opening services (site selection, facility assistance, training, manuals, bookkeeping/IT/advisory, quality control) as distinct from the franchise license, and may further elect as an accounting policy to treat all such pre-opening services as a single performance obligation. The expedient affects only step 2 of the model; allocation of transaction price and timing of recognition still follow Topic 606.", "key_points": [ "Revenue is recognized under Topic 606; this subtopic only provides a practical expedient (952-606-25-1).", "A franchisor may account for the six categories of pre-opening services listed in 952-606-25-2 as distinct from the franchise license.", "If the expedient is elected, the franchisor still applies 606-10-25-19 through 25-22 to determine whether the pre-opening services are distinct from one another, unless it makes an accounting policy election to treat them as a single performance obligation (952-606-25-3).", "The expedient applies only to identifying performance obligations and must be applied consistently to contracts with similar characteristics and in similar circumstances; allocation and recognition follow Topic 606 (952-606-25-4).", "If the expedient is not elected, or the services do not match the list, the franchisor applies the general Topic 606 performance obligation guidance (952-606-25-4).", "A public business entity shall not apply this guidance, and entities outside its scope may not apply it directly or by analogy (606-952-15-2).", "Election of the practical expedient and of the single-performance-obligation policy must each be disclosed (952-606-50-1 through 50-2)." ], "categories": [ "Revenue", "Recognition", "Disclosure", "Industry-specific" ], "audience_level": "intermediate", "student_note": "Exam traps: the expedient is available only to non-public franchisors and only for step 2 (identifying performance obligations)—it does not change transaction price allocation, the sales-based royalty constraint, or the timing of revenue recognition. Also note the two separate elections (the expedient itself, and the single-performance-obligation policy), each with its own disclosure requirement.", "related_topics": [ "606-10", "952-10", "952-605", "340-40" ], "key_concepts": [ "franchise license", "pre-opening services", "practical expedient", "performance obligation identification", "distinct goods or services", "accounting policy election", "sales-based royalty", "non-public business entity" ] } ``` Source downloaded (UTC): 2026-09-09T23:18:34.884Z to 2026-09-09T23:18:34.884Z Record version: sha256:2a9bcad966289c48a8a86313d2b1a8529c7f726dcf925cc2c97e7eb1090cc73f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 606-952-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/606/952/#00-status) SEC content: no ##### [606-952-00-1](https://asc.understandingaccounting.org/asc/606/952/#606-952-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:34.884Z to 2026-09-09T23:18:34.884Z Record version: sha256:2be92619eba380d78aa841e76afad88f8a2c736fa7a9ed221d055e82cab94023 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
ContractAddedAccounting Standards Update No. 2021-0201/28/2021
Customer (1st def.)AddedAccounting Standards Update No. 2021-0201/28/2021
Franchise AgreementAddedAccounting Standards Update No. 2021-0201/28/2021
FranchisorAddedAccounting Standards Update No. 2021-0201/28/2021
Not-for-Profit EntityAddedAccounting Standards Update No. 2021-0201/28/2021
Performance ObligationAddedAccounting Standards Update No. 2021-0201/28/2021
Public Business EntityAddedAccounting Standards Update No. 2021-0201/28/2021
Security (2nd def.)AddedAccounting Standards Update No. 2021-0201/28/2021
952-606-05-1AddedAccounting Standards Update No. 2021-0201/28/2021
952-606-15-1AddedAccounting Standards Update No. 2021-0201/28/2021
952-606-15-2AddedAccounting Standards Update No. 2021-0201/28/2021
952-606-25-1 through 25-4
AddedAccounting Standards Update No. 2021-0201/28/2021
952-606-50-1AddedAccounting Standards Update No. 2021-0201/28/2021
952-606-50-2AddedAccounting Standards Update No. 2021-0201/28/2021
952-606-55-1 through 55-5
AddedAccounting Standards Update No. 2021-0201/28/2021
952-606-65-1AddedAccounting Standards Update No. 2021-0201/28/2021
Source downloaded (UTC): 2026-09-09T23:18:37.156Z to 2026-09-09T23:18:37.156Z Record version: sha256:d493c97ed04dc8751a556e691f5c25987b10267c274a5d56bc6ceafa768bc7fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 606-952-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/606/952/#05-overview-and-background) SEC content: no ##### [606-952-05-1](https://asc.understandingaccounting.org/asc/606/952/#606-952-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:37.156Z to 2026-09-09T23:18:37.156Z Record version: sha256:29f87bb2317109e05eabdad7202b1519b7e229a15e825c1b9ec5c997c0991c15 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses a practical expedient for revenue recognition for a [franchisor](https://asc.understandingaccounting.org/glossary/f/#franchisor "The party who grants business rights (the franchise) to the party (the franchisee) who will operate the franchised business.") that is not a [public business entity](https://asc.understandingaccounting.org/glossary/p/#public-business-entity "A public business entity is a business entity meeting any one of the criteria below. Neither a not-for-profit entity nor an employee benefit plan is a business entity. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing). It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer. It has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including notes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion. An entity may meet the definition of a public business entity solely because its financial statements or financial information is included in another entity's filing with the SEC. In that case, the entity is only a public business entity for purposes of financial statements that are filed or furnished with the SEC."). Source downloaded (UTC): 2026-09-09T23:18:39.750Z to 2026-09-09T23:18:39.750Z Record version: sha256:cdb95eac5ed49953b487739ae85ebde0680ae9f4d8c641f91ffcd1117fee021a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 606-952-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/606/952/#15-scope-and-scope-exceptions) SEC content: no ##### [606-952-15-1](https://asc.understandingaccounting.org/asc/606/952/#606-952-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:39.750Z to 2026-09-09T23:18:39.750Z Record version: sha256:f17ccb4ec3dc73eccfb31c42bb9f14b9aaf010cdd7d57f06efbc5d08e662e0e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 952-10-15. ##### [606-952-15-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-15-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:39.750Z to 2026-09-09T23:18:39.750Z Record version: sha256:b6659534fa5509d58cd1d895ccaeb6de736ff1cd23fc8f83e1e00bbab2bf9705 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [public business entity](https://asc.understandingaccounting.org/glossary/p/#public-business-entity "A public business entity is a business entity meeting any one of the criteria below. Neither a not-for-profit entity nor an employee benefit plan is a business entity. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing). It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer. It has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including notes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion. An entity may meet the definition of a public business entity solely because its financial statements or financial information is included in another entity's filing with the SEC. In that case, the entity is only a public business entity for purposes of financial statements that are filed or furnished with the SEC.") shall not apply the guidance in this Subtopic. Entities that are not within the scope of this Subtopic shall not apply the guidance in this Subtopic directly or by analogy. Source downloaded (UTC): 2026-09-09T23:18:44.720Z to 2026-09-09T23:18:44.720Z Record version: sha256:4f122a799c6e010ba80587485387957ee6ebcfd165f8b935ef9cb6cca5bc79bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 606-952-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/606/952/#25-recognition) SEC content: no ##### [606-952-25-1](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:44.720Z to 2026-09-09T23:18:44.720Z Record version: sha256:767f8e3b031bc528a175a6d8633dc4acf80e3a37489e1394ff40f364b7ed6dea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Revenue shall be recognized in accordance with Topic 606, Revenue from Contracts with Customers. ##### [606-952-25-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:44.720Z to 2026-09-09T23:18:44.720Z Record version: sha256:a6aa81bbf964484a92e4c34ba5806664c3dc93d808dc6e5b37d375efc1842ed1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As a practical expedient, when applying the guidance in Topic 606, a [franchisor](https://asc.understandingaccounting.org/glossary/f/#franchisor "The party who grants business rights (the franchise) to the party (the franchisee) who will operate the franchised business.") that enters into a [franchise agreement](https://asc.understandingaccounting.org/glossary/f/#franchise-agreement "A written business agreement that meets the following principal criteria: The relation between the franchisor and franchisee is contractual, and an agreement, confirming the rights and responsibilities of each party, is in force for a specified period. The continuing relation has as its purpose the distribution of a product or service, or an entire business concept, within a particular market area. Both the franchisor and the franchisee contribute resources for establishing and maintaining the franchise. The franchisor's contribution may be a trademark, a company reputation, products, procedures, manpower, equipment, or a process. The franchisee usually contributes operating capital as well as the managerial and operational resources required for opening and continuing the franchised outlet. The franchise agreement outlines and describes the specific marketing practices to be followed, specifies the contribution of each party to the operation of the business, and sets forth certain operating procedures that both parties agree to comply with. The establishment of the franchised outlet creates a business entity that will, in most cases, require and support the full-time business activity of the franchisee. (There are numerous other contractual distribution arrangements in which a local businessperson becomes the authorized distributor or representative for the sale of a particular good or service, along with many others, but such a sale usually represents only a portion of the person's total business.) Both the franchisee and the franchisor have a common public identity. This identity is achieved most often through the use of common trade names or trademarks and is frequently reinforced through advertising programs designed to promote the recognition and acceptance of the common identity within the franchisee's market area. The payment of an initial franchise fee or a continuing royalty fee is not a necessary criterion for an agreement to be considered a franchise agreement.") may account for the following pre-opening services as distinct from the franchise license: 1. a Assistance in the selection of a site 2. b Assistance in obtaining facilities and preparing the facilities for their intended use, including related financing, architectural, and engineering services, and lease negotiation 3. c Training of the franchisee's personnel or the franchisee 4. d Preparation and distribution of manuals and similar material concerning operations, administration, and record keeping 5. e Bookkeeping, information technology, and advisory services, including setting up the franchisee's records and advising the franchisee about income, real estate, and other taxes or about regulations affecting the franchisee's business 6. f Inspection, testing, and other quality control programs. ##### [606-952-25-3](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:44.720Z to 2026-09-09T23:18:44.720Z Record version: sha256:7a87b5959f00a543322b52e53b3cf67b9cacf9ccd2769b46d1d40cf9765e8996 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A franchisor that elects the practical expedient in paragraph [952-606-25-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-2) shall apply the guidance in paragraphs [606-10-25-19 through 25-22](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-19) to determine whether the pre-opening services are distinct from one another unless it makes an accounting policy election to account for the pre-opening services as a single [performance obligation](https://asc.understandingaccounting.org/glossary/p/#performance-obligation "A promise in a contract with a customer to transfer to the customer either: A good or service (or a bundle of goods or services) that is distinct A series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer."). ##### [606-952-25-4](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:44.720Z to 2026-09-09T23:18:44.720Z Record version: sha256:40c7ca18a2b0e68123f5e005d627085d81e08d053fd8e2d3ef379a049143d305 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The practical expedient in paragraph [952-606-25-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-2) applies only to identifying performance obligations. An entity shall apply this guidance consistently to contracts with similar characteristics and in similar circumstances. An entity should see Topic 606 for guidance on the remaining aspects of recognizing revenue from contracts with customers, including allocating the transaction price and recognizing revenue. If an entity elects not to apply the practical expedient or if the services performed are not consistent with the list in paragraph [952-606-25-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-2), the entity shall apply the guidance in Topic 606 on identifying performance obligations. Source downloaded (UTC): 2026-09-09T23:18:46.856Z to 2026-09-09T23:18:46.856Z Record version: sha256:de35ae7540c0feee3f610cfff3725c3eb1f88941eb099e68fa5e9f9c41b48150 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 606-952-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/606/952/#50-disclosure) SEC content: no ##### [606-952-50-1](https://asc.understandingaccounting.org/asc/606/952/#606-952-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:46.856Z to 2026-09-09T23:18:46.856Z Record version: sha256:d55cab6981dd7422c284b598a3cad6f4d08fe9737b7d839116a2c18bb312c841 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity elects to use the practical expedient in paragraph [952-606-25-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-2), the entity shall disclose that fact. ##### [606-952-50-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:46.856Z to 2026-09-09T23:18:46.856Z Record version: sha256:9f072583044d565a438fefe21fcfeaa67dd7fd09cb3e01f1ce52a5ff761fd62f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity that makes the accounting policy election to recognize pre-opening services as a single performance obligation as described in paragraph [952-606-25-3](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-3) shall disclose that fact. Source downloaded (UTC): 2026-09-09T23:18:49.155Z to 2026-09-09T23:18:49.155Z Record version: sha256:f15c45499b814fa5281ba26136e48b1ba0f85b93723c68229fc68928a7e06497 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 606-952-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/606/952/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [606-952-55-1](https://asc.understandingaccounting.org/asc/606/952/#606-952-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:49.155Z to 2026-09-09T23:18:49.155Z Record version: sha256:891a135b0088635c2d85310361787d93693501de0d6d0de58a2cf1f88f1233c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity enters into a [contract](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with a [customer](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration.") and promises to grant a franchise license to open a restaurant location. The franchise license term is 10 years. In addition to the license, the entity also promises to provide two services related to the opening of the franchise location—site selection and training. The entity receives a fixed fee of $25,000, as well as a sales-based royalty of 5 percent of the customer's sales for the term of the license. The fixed consideration of $25,000 is payable on or before the opening of the restaurant location. ##### [606-952-55-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:49.155Z to 2026-09-09T23:18:49.155Z Record version: sha256:0860a12d63ca6e901fb162839954fdd53180677e076f7f2a78332cc92a60f352 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity first assesses whether it is eligible for the practical expedient for identifying [performance obligations](https://asc.understandingaccounting.org/glossary/p/#performance-obligation "A promise in a contract with a customer to transfer to the customer either: A good or service (or a bundle of goods or services) that is distinct A series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer.") in paragraph [952-606-25-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-2). The entity determines that it is eligible because it is not a [public business entity](https://asc.understandingaccounting.org/glossary/p/#public-business-entity "A public business entity is a business entity meeting any one of the criteria below. Neither a not-for-profit entity nor an employee benefit plan is a business entity. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing). It is required by the Securities Exchange Act of 1934 (the Act), as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer. It has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including notes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion. An entity may meet the definition of a public business entity solely because its financial statements or financial information is included in another entity's filing with the SEC. In that case, the entity is only a public business entity for purposes of financial statements that are filed or furnished with the SEC."), it is a [franchisor](https://asc.understandingaccounting.org/glossary/f/#franchisor "The party who grants business rights (the franchise) to the party (the franchisee) who will operate the franchised business.") that is within the scope of Topic 952, and it has entered into a franchise agreement with a customer. ##### [606-952-55-3](https://asc.understandingaccounting.org/asc/606/952/#606-952-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:49.155Z to 2026-09-09T23:18:49.155Z Record version: sha256:091a0ef493da4287da95ae350992feed2a19d1c3b993d57b4d61ff40ee5ac121 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In applying the practical expedient, the entity compares its pre-opening services (training and site selection) to the list of services in paragraph [952-606-25-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-2) instead of applying the guidance in paragraph [606-10-25-19](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-19). The entity determines that those services may be accounted for as distinct from the franchise license because they are consistent with the list of services in paragraph [952-606-25-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-2). The entity makes an accounting policy election to account for all pre-opening services that are consistent with the list in paragraph [952-606-25-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-25-2) as a single performance obligation. Therefore, the entity determines that it has two performance obligations—a franchise license and pre-opening services. ##### [606-952-55-4](https://asc.understandingaccounting.org/asc/606/952/#606-952-55-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:49.155Z to 2026-09-09T23:18:49.155Z Record version: sha256:26c3940f1d0680bc5b378a1d202464d3921fe7910792f3234f96b5ed396fbb32 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity then applies the guidance in paragraphs [606-10-32-28 through 32-45](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-28) to allocate the transaction price to the performance obligations and the guidance in paragraphs [606-10-25-23 through 25-37](https://asc.understandingaccounting.org/asc/606/10/#606-10-25-23) and [606-10-55-65 through 55-65B](https://asc.understandingaccounting.org/asc/606/10/#606-10-55-65) to determine when and how to recognize revenue for satisfaction of the performance obligations. ##### [606-952-55-5](https://asc.understandingaccounting.org/asc/606/952/#606-952-55-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:49.155Z to 2026-09-09T23:18:49.155Z Record version: sha256:ad2ec7c517a7537870fd7c613acdf6c7be40a4a8746615aab6dca565d6da1fe5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity discloses its use of the practical expedient and its accounting policy election to treat the pre-opening services as a single performance obligation in accordance with the disclosure requirements in paragraphs [952-606-50-1 through 50-2](https://asc.understandingaccounting.org/asc/606/952/#606-952-50-1) . Source downloaded (UTC): 2026-09-09T23:18:51.476Z to 2026-09-09T23:18:51.476Z Record version: sha256:13f92fa91d6b1de21e535d74c12d03786400572051e7ade2f7e6a42abcb5600b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 606-952-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/606/952/#65-transition-and-open-effective-date-information) SEC content: no ##### [606-952-65-1](https://asc.understandingaccounting.org/asc/606/952/#606-952-65-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:18:51.476Z to 2026-09-09T23:18:51.476Z Record version: sha256:1237ee9a1c874d068b0460e5f7e1e34a183e88d1bb46dc6ee1f81670ba4d13b4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 12/14/2022 after the end of the transition period stated in Accounting Standards Update No. 2021-02, _Franchisors—Revenue from Contracts with Customers (Subtopic 952-606): Practical Expedient_.