What are the five steps of ASC 606?

Identify the contract with the customer; identify the performance obligations; determine the transaction price; allocate the transaction price to the performance obligations; and recognize revenue when or as each performance obligation is satisfied.

How does Gaapio handle variable consideration?

It analyzes the variable elements in the contract, walks the estimation approach and the constraint, and documents the reasoning behind the estimate — which is the part that gets questioned in review.

Is this a replacement for our revenue subledger or billing system?

No. Those systems calculate and post. Gaapio handles the technical accounting question of what the contract requires and why, and produces the memo and disclosure language.

Can it help with ASC 606 implementation on a new revenue stream?

Yes. Implementation work is mostly building the analysis for a class of contracts once and applying it consistently afterward — which is exactly what the workflow is structured around.

Revenue Recognition Software for ASC 606 | Memos & Contract Analysis

Everybody can recite the five steps. The difficulty was never the model — it is applying it to a contract that does not fit cleanly, writing down why, and then reaching the same conclusion on the next twenty contracts that look almost but not quite the same.

The five steps are the easy part

Identify the contract, identify the performance obligations, determine the transaction price, allocate it, recognize revenue as obligations are satisfied. Straightforward as a framework. Considerably less so when the arrangement includes a term license bundled with support, usage-based fees with a cap, a renewal at a discount, and a clause Legal negotiated that nobody flagged to accounting.

Three problems show up repeatedly, and none of them are calculation problems.

Distinct, or not distinct

A promised good or service is distinct only if it is both capable of being distinct and separately identifiable within the context of the contract — and the second criterion is the judgment that drives the whole answer. It is also the one most likely to be resolved in a hallway conversation and never written down.

Variable consideration

Estimating it, then constraining it. The estimate is defensible when the reasoning is documented and awkward when the file just contains a number.

Consistency at volume

Two substantially similar contracts, two different conclusions, six months apart, two different preparers. This is one of the most common revenue findings and among the hardest to unwind after the fact.

How Gaapio works an ASC 606 arrangement

1
Read the contract for its accounting terms. Upload the agreement and any side letters or order forms. Gaapio extracts the terms that drive revenue — deliverables, pricing structure, variable elements, termination and renewal rights, material rights — and shows where each came from in the document.
2
Work the five steps explicitly. Each step is analyzed and written out, not collapsed into a conclusion. Where the answer depends on judgment, the judgment is identified as a judgment rather than presented as a fact.
3
Pressure-test the distinct analysis. The system surfaces the arguments on both sides of a close call so the reviewer can see the reasoning rather than reverse-engineer it.
4
Draft the memo. A reviewer-ready memo with every conclusion anchored to a Codification reference you can click through and verify.
5
Draft the disclosure. Disaggregation, contract balances, remaining performance obligations and significant judgments — benchmarked against how comparable filers present the same items.

500+

hours saved in six months

$100K+

in advisory fees saved

It writes most of our technical accounting memos — including our ASC 606 revenue recognition memos and any complex, one-off technical issues that come up. The memos come out structured, well-supported, and grounded in actual ASC guidance, so we're not starting from a blank page and we're not second-guessing whether the references are real.
Controller, CPA

Consistency is the feature, not the speed

Teams usually come to us because a memo took three weeks. They stay because the twentieth contract of a given type gets analyzed the same way as the first — same framework, same documentation standard, same citations — regardless of who worked it or when.

That consistency is also the thing a general-purpose AI tool does not reliably give you, since the answer varies with the phrasing and with what happens to be in context.

Shared templates and version history are what make that true. So does having the reasoning on the page instead of in somebody's memory.

Anchored to the Codification

The FASB Codification is licensed directly from the Financial Accounting Foundation. Every conclusion carries a citation, and the citation is checkable.

Judgment stays with you

The system produces the analysis and the support. It does not pretend a judgment call is a computation, and it flags where reasonable practitioners could land differently.

Built for the reviewer

Memos structured the way a reviewer reads them, so checking the work is faster than checking a junior's draft.

Built by CPAs

Including former Big Four. The workflow follows how revenue conclusions are actually challenged.

Frequently asked questions

Software that helps companies apply ASC 606 to customer contracts — identifying performance obligations, determining and allocating the transaction price, and documenting the conclusions. Gaapio focuses on the analysis and documentation layer rather than the billing or subledger mechanics.

See it on a contract you are unsure about

Bring a real arrangement — ideally a messy one. We'll walk the ASC 606 analysis with you and show you the citation trail.

Request a Demo Talk to a CPA

References: FASB ASC 606, Revenue from Contracts with Customers. This page is general information, not accounting advice for a specific entity.

Revenue Recognition Software for ASC 606