---
title: Consignment Arrangements
description: Delivering a product to another party while retaining control, meaning revenue cannot be recognized until a subsequent consumer sale occurs. The deliv...
sidebar_position: 44
tags: ['asc-606', 'Revenue']
---

# 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.