When does All Team recognize revenue after adopting ASC 606?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
In 2019, the Company adopted ASC 606, Revenue from Contracts with Customers, which amended the existing accounting standards for revenue recognition. Consequently, the Company recognizes revenue when the services are provided, persuasive evidence of an arrangement exists, the price is fixed and collection is reasonably assured in accordance with ASC 606.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 33)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the company adopted ASC 606, Revenue from Contracts with Customers, in 2019. This accounting standard amended the existing rules for revenue recognition.
Following the adoption of ASC 606, All Team recognizes revenue when specific conditions are met. These conditions include when the services are provided to the customer. Additionally, there must be persuasive evidence of an arrangement, meaning there is a clear agreement in place. The price for the services must be fixed, so there is no uncertainty about the amount to be paid. Finally, collection must be reasonably assured, indicating that All Team is confident they will receive payment for the services rendered.
In summary, All Team recognizes revenue when it has provided the agreed-upon services, has a clear agreement with the customer, knows the fixed price for the services, and is reasonably confident it will receive payment. This approach ensures that revenue is recognized in a manner that accurately reflects when it has been earned and is likely to be collected.