Consignment Arrangements
Consignment Arrangements
The ASC 606 Standard
Delivering a product to another party while retaining control, meaning revenue cannot be recognized until a subsequent consumer sale occurs. The delivering entity retains the inventory risk.
The Real-World Scenario
You place your physical products on the shelves of a major retail chain, but you only get paid when a consumer actually checks out at the register.
The Spreadsheet Breaking Point
Tracking physical inventory at third-party locations via manual spreadsheets leads to premature and illegal revenue recognition.
The Hidden Cost to the Bottom Line
Recognizing revenue just because inventory moved warehouses artificially spikes earnings and guarantees an audit failure.
How GAAPX Eliminates the Risk
Tracks inventory status systemically and strictly gates revenue recognition until end-consumer point-of-sale data is verified.