Revenue Disaggregation Disclosures: Ford Case Study

Keywords

revenue disaggregation, ASC 606 categories, Ford disclosures

Abstract

In a previous article, Disclosures, we discussed the disclosures required by Accounting Standards Codification (ASC) 606. Now that most public companies have filed their first 10-Qs under the new standard and some have filed 10-Ks, we can provide examples of these disclosures. In this article, we focus specifically on disaggregation of revenue as disclosed by Ford Motor Company.

ASC 606 requires that revenue be disaggregated into categories that help users determine the nature, amount, timing, and uncertainty of revenue and cash flows. Multiple categories may be necessary. In addition, the standard requires companies to disclose how they choose these categories. ASC 606-10-55-91 provides the following potential categories:

  • Type of good or service (e.g., product or service lines)
  • Geographical region (e.g., country or region)
  • Market or type of customer (e.g., government or non-government)
  • Type of contract (e.g., fixed price or unit price)
  • Contract duration (e.g., short-term or long-term)
  • Timing of transfer of goods or services (e.g., at a point in time or over time)
  • Sales channels (e.g., directly to consumers or through intermediaries)

Although the standard provides some illustrations, a few real-life examples can shed some light on how companies have interpreted the requirements.

Original Publication Citation

Revenue Disaggregation Disclosures: Ford Case Study (A. Schwendiman and T. J. Wilks), RevenueHub, November 29, 2018. (2,852 unique views as of Jan. 13, 2023)

Document Type

Peer-Reviewed Article

Publication Date

2018

Publisher

RevenueHub

Language

English

College

Marriott School of Business

Department

Accountancy

University Standing at Time of Publication

Full Professor

Link to Full Text

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