Five steps. Every contract.
Aleq reads the contract, splits the performance obligations, allocates the price by standalone selling price, and recognizes revenue as you deliver — re-derived the moment the deal changes.
One model, start to finish.
ASC 606 is one five-step model. Aleq runs all five from the signed contract — and re-runs them whenever it changes.
One price, allocated by SSP.
The Cyberdyne deal bundles a platform license, implementation, and premium support at a blended $540,000 — a 10% discount on their standalone prices. Aleq allocates the transaction price across the three obligations by standalone selling price, spreads the discount proportionally, and times each piece on its own pattern.
| Obligation | SSP | Allocated | Timing |
|---|---|---|---|
| Platform license36-month term | $480,000 | $432,000 | over time |
| Implementationcost-to-cost | $90,000 | $81,000 | over time |
| Premium support36-month term | $30,000 | $27,000 | over time |
| Transaction price | $600,000 | $540,000 | — |
Modification accounting is the actual judgment call.
A new line at list price, a renegotiated price, a longer term, and a deferred-payment structure look similar on a redline. Under ASC 606 they're four different treatments — and one of them, Aleq won't decide alone. Pick a scenario.
The analytics module is distinct from what's already being delivered, and it's priced at what Aleq would charge for it on its own — both conditions for a separate contract. The original schedule isn't touched; this is its own five-step run.
Revenue recognizes differently by what you sell.
Ratable, point-in-time, over-time, net-versus-gross — the recognition pattern depends on the business. Aleq applies the one that fits yours.
Subscription ratable, usage at the point it's used.
The subscription recognizes straight-line over the term; metered overage recognizes as consumed; setup and onboarding fees spread over the period they benefit. Aleq keeps all three on one schedule and re-derives the moment a customer expands.
- Subscription recognized ratably across the committed term.
- Usage & overage recognized point-in-time as it's consumed.
- Mid-term expansion re-allocated and re-derived, prior periods intact.
Principal or agent — the call that sets net vs gross.
Whether you recognize the whole transaction or just your take rate turns on who controls the good or service before transfer. Aleq drafts the principal-versus-agent assessment with its reasoning and holds it for your sign-off — it moves the top line, so it never decides alone.
- Agent recognize the commission / take rate, net.
- Principal recognize gross, with the supplier cost in COGS.
- The control test drafted against ASC 606-10-55, held for sign-off.
Over time, measured by progress toward done.
When your work creates an asset the customer controls as it's built, revenue recognizes over time. Aleq measures progress by an input or output method and recognizes against it each period — no waiting for the final invoice.
- Over-time recognition where control transfers as you perform.
- Input or output method cost-to-cost or milestones, applied consistently.
- Estimate changes trued up cumulatively as scope moves.
Recognized at transfer of control — warranty apart.
The unit recognizes when control transfers to the buyer; an extended warranty or service plan is a separate performance obligation recognized over its own term. Aleq splits the bundle and times each piece on its own.
- Goods recognized point-in-time at transfer of control.
- Extended warranty separate obligation, recognized over the term.
- Bill-and-hold tested against the control criteria before recognition.
Custom builds can recognize as you make them.
Goods with no alternative use and an enforceable right to payment for work completed recognize over time, not on shipment. Aleq tests each build against those criteria and recognizes against progress where they're met.
- No alternative use plus right to payment → over-time recognition.
- Standard goods recognized point-in-time at transfer of control.
- Progress measured by units produced or cost incurred.
Variable consideration, constrained to what holds.
Payer adjustments, contractual allowances, and implicit price concessions make the transaction price an estimate. Aleq recognizes net of the constraint — only the amount highly likely not to reverse — and trues up as remittances land.
- Contractual allowances netted from gross charges at recognition.
- The constraint revenue capped at what won't reverse.
- Remittance true-up estimate adjusted as cash settles.
What controllers and auditors ask.
ASC 606 recognizes revenue through a single five-step model: identify the contract with the customer, identify the distinct performance obligations, determine the transaction price including any variable consideration, allocate that price to each obligation by relative standalone selling price, and recognize revenue as each obligation is satisfied, either over time or at a point in time. The same model applies across industries and contract types. Aleq runs all five steps from the signed contract, books the resulting schedule to the general ledger, and re-runs the model when the contract changes.
Run one contract through the five steps.
Bring a signed contract. Watch Aleq split the obligations, allocate the price by standalone selling price, and recognize revenue on schedule from your ledger — re-derived the moment the deal changes, every entry drafted for your sign-off.