The five steps,
run on every contract.
Aleq reads the contract, splits the performance obligations, allocates the price by standalone selling price, and recognizes revenue as you deliver — re-derived the moment the deal changes.
One model, start to finish.
ASC 606 is one five-step model. Aleq runs all five from the signed contract — and re-runs them whenever it changes.
One price, allocated by SSP.
The Cyberdyne deal bundles a platform license, implementation, and premium support at a blended $540,000 — a 10% discount on their standalone prices. Aleq allocates the transaction price across the three obligations by standalone selling price, spreads the discount proportionally, and times each piece on its own pattern.
| Obligation | SSP | Allocated | Timing |
|---|---|---|---|
| Platform license36-month term | $480,000 | $432,000 | over time |
| Implementationcost-to-cost | $90,000 | $81,000 | over time |
| Premium support36-month term | $30,000 | $27,000 | over time |
| Transaction price | $600,000 | $540,000 | — |
An expansion, re-derived in place.
A mid-term upsell, a renewal, a price change — a contract modification under ASC 606 is its own judgment: a separate contract, or a reallocation across the remaining obligations. Aleq drafts the treatment, re-allocates the price, and rebuilds the schedule forward — every period you already closed stays put.
The estimates are yours to make.
Whether two promises are one obligation or several, what a standalone selling price is when you never sell it alone, how far to constrain variable consideration — these are estimates, not arithmetic. Aleq drafts each with its basis against the codification and holds it for your sign-off.
Implementation is never sold separately, so no observable price exists. Estimated under ASC 606-10-32-34 at expected cost plus the margin earned on comparable engagements — $90,000, consistent with recent deals.
Revenue recognizes differently by what you sell.
Ratable, point-in-time, over-time, net-versus-gross — the recognition pattern depends on the business. Aleq applies the one that fits yours.
Subscription ratable, usage at the point it's used.
The subscription recognizes straight-line over the term; metered overage recognizes as consumed; setup and onboarding fees spread over the period they benefit. Aleq keeps all three on one schedule and re-derives the moment a customer expands.
- Subscription recognized ratably across the committed term.
- Usage & overage recognized point-in-time as it's consumed.
- Mid-term expansion re-allocated and re-derived, prior periods intact.
Principal or agent — the call that sets net vs gross.
Whether you recognize the whole transaction or just your take rate turns on who controls the good or service before transfer. Aleq drafts the principal-versus-agent assessment with its reasoning and holds it for your sign-off — it moves the top line, so it never decides alone.
- Agent recognize the commission / take rate, net.
- Principal recognize gross, with the supplier cost in COGS.
- The control test drafted against ASC 606-10-55, held for sign-off.
Over time, measured by progress toward done.
When your work creates an asset the customer controls as it's built, revenue recognizes over time. Aleq measures progress by an input or output method and recognizes against it each period — no waiting for the final invoice.
- Over-time recognition where control transfers as you perform.
- Input or output method cost-to-cost or milestones, applied consistently.
- Estimate changes trued up cumulatively as scope moves.
Recognized at transfer of control — warranty apart.
The unit recognizes when control transfers to the buyer; an extended warranty or service plan is a separate performance obligation recognized over its own term. Aleq splits the bundle and times each piece on its own.
- Goods recognized point-in-time at transfer of control.
- Extended warranty separate obligation, recognized over the term.
- Bill-and-hold tested against the control criteria before recognition.
Custom builds can recognize as you make them.
Goods with no alternative use and an enforceable right to payment for work completed recognize over time, not on shipment. Aleq tests each build against those criteria and recognizes against progress where they're met.
- No alternative use plus right to payment → over-time recognition.
- Standard goods recognized point-in-time at transfer of control.
- Progress measured by units produced or cost incurred.
Variable consideration, constrained to what holds.
Payer adjustments, contractual allowances, and implicit price concessions make the transaction price an estimate. Aleq recognizes net of the constraint — only the amount highly likely not to reverse — and trues up as remittances land.
- Contractual allowances netted from gross charges at recognition.
- The constraint revenue capped at what won't reverse.
- Remittance true-up estimate adjusted as cash settles.
What controllers and auditors ask.
How does it identify performance obligations?
Aleq reads the contract and separates each promise that is capable of being distinct and distinct in the context of the contract — license, implementation, support. Where it's a judgment call, it drafts the conclusion with its reasoning and holds it for your sign-off.
Where does the standalone selling price come from?
Observable price where you sell the item separately; otherwise an estimate — adjusted market, expected cost plus margin, or residual where allowed. Aleq shows the method and the basis, and you confirm it before the allocation locks.
Does it handle variable consideration?
Yes. Discounts, rebates, usage, and concessions are estimated and constrained to the amount highly likely not to reverse, then trued up as actuals land. The constraint is shown so you can see what was held back and why.
How are contract modifications treated?
Aleq drafts whether a change is a separate contract or a modification of the existing one, re-allocates the remaining transaction price prospectively where required, and rebuilds the schedule from that date. Prior periods stay exactly as filed.
Can it produce the RPO disclosure?
Every period exports the remaining performance obligation disclosure — recognized, deferred, and backlog — tied to the ledger and traced to each contract, with the recognition schedule and provenance attached.
Run one contract through the five steps.
Bring a signed contract. Watch Aleq split the obligations, allocate the price by standalone selling price, and recognize revenue on schedule from your ledger — re-derived the moment the deal changes, every entry drafted for your sign-off.