Question

Case 5-4 Accounting fo Accounting for University Tuition and Housing Cases 187 Bismarck University, a for-pro University, a tor-pront private institution, pub- a month nrior to the start of the semester. There is an a its tuition and housing costs on its website. These fees dron neriod (first two weeks of the semester) when the sun are different for the various educational levels and dent may receive a partial refund of the total amount of tuition ved. The university also offers various aid packages to and housing charged. students including scholarships and discounts for both tuition and housing. Upon acceptance to the university, a student must pay a nonrefundable deposit to maintain a spot. The uni- How should Bismarck use the five-step process contained in versity later sends a bill for the remaining balance that is due FASB ASC 606 to recognize revenue? Required:

Answer 1

Five step Process to recognize revenue as pe FASB ASC 606

A) Identification of contract with students. An agreement between the University and the student for creating obligation and rights that can be enforced when necessary.

B) Identificationof performance obligation with student. This to give specified service to the student.

C) Determination of transaction price with student. This is deliver the service after receipt of transaction price.

D) Allocation of transaction price to the performance obligation in the contract.

E) Recognition of revenue as and when performance obligation is satisfied.