What is Revenue Recognition model based on ASC 606

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ASC 606 is a revenue recognition standard that outlines the principles for recognizing revenue from contracts with customers.

ASC 606 requires companies to recognize revenue when goods or services are transferred to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services.
The standard also requires companies to identify performance obligations in a contract, determine the transaction price, allocate the transaction price to the performance obligations, and recognize revenue when each performance obligation is satisfied.
ASC 606 replaces the previous revenue recognition standard, ASC 605, and aims to provide a more consistent and comprehensive framework for revenue recognition across industries.
For example, under ASC 606, a software company may need to recognize revenue over time as it delivers updates and support services to customers, rather than recognizing all revenue upfront at the time of sale.

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