> For the complete documentation index, see [llms.txt](https://docs.kick.co/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.kick.co/accountants/schedules/revenue-recognition/asc-606.md).

# How recognition relates to ASC 606

See which ASC 606 decisions stay with you, and which entries Kick posts from the policy you apply.

Kick revenue recognition applies your policy to a source, creates the recognition schedule, and posts the entries on the Accrual ledger. It does not store the contract, identify the obligations, or decide the transaction price allocation.

{% hint style="warning" %}
**Your conclusion**. Applying a policy does not make the books ASC 606 compliant. Kick posts the recognition you set up.
{% endhint %}

***

### The five steps

<table><thead><tr><th width="240">Step</th><th>You</th><th>Kick</th></tr></thead><tbody><tr><td><strong>Identify the contract</strong></td><td>Decide which customer arrangement the amount belongs to.</td><td>Kick does not store a contract. The schedule hangs off a source: an invoice line, a payment, or a manual amount.</td></tr><tr><td><strong>Identify the performance obligations</strong></td><td>Decide which obligation the source represents, and whether a line or payment needs to be split before recognition.</td><td>Kick applies the policy to the source you choose. Other lines and amounts stay as they are.</td></tr><tr><td><strong>Determine the transaction price</strong></td><td>Set the source amount after tax, deposits, and non-revenue amounts are out.</td><td>Kick recognizes the source amount. It does not estimate variable consideration, refunds, or future discounts.</td></tr><tr><td><strong>Allocate the transaction price</strong></td><td>Allocate before the amount enters Kick. If the source amount is not the allocated price, change the source first.</td><td>Component percents split how one source amount is recognized, such as 20% now and 80% over the term. They are not relative standalone selling price.</td></tr><tr><td><strong>Recognize as the obligation is satisfied</strong></td><td>Choose the policy method. For a milestone policy, confirm each milestone when it is achieved.</td><td>Kick posts the recognition entries on the Accrual ledger when you apply the policy, including future periods, using straight-line, daily pro rata, or point-in-time. Milestone entries post when you confirm the milestone.</td></tr></tbody></table>

***

### Where this fits well

Kick is a strong fit when the invoice line, payment, or manual amount is the amount to recognize. That covers many SaaS subscriptions, professional services contracts, construction milestones, and media or sponsorship agreements.

It is not the right tool yet when the obligation amount must differ from the source because the contract price is allocated by relative standalone selling price. Standalone selling price allocation is coming. Until then, enter the allocated amount on the source yourself before you start the recognition schedule.

***

### When the arrangement changes

Pause, resume, stop, accelerate, and reclassify are schedule actions. Kick does not decide whether the change is a new contract or a modification. When a schedule change offers **Catch up**, Kick posts the catch-up you choose.

Entries already posted stay posted. A period on or before the lock date is not rewritten.


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation by asking a question.

Perform an HTTP GET request on the following URL with the `ask` and `goal` query parameters:

```
GET https://docs.kick.co/accountants/schedules/revenue-recognition/asc-606.md?ask=<question>&goal=<user_goal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is what the user is ultimately trying to achieve, the reason they need the answer. Sharing it helps GitBook give you a better, more relevant answer. A goal is most helpful when it describes the outcome the user wants rather than restating the question. For example, with `ask=how do I create an API token`, a goal like `automate deployments from our CI pipeline` lets GitBook tailor the answer to that use case.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.