ASC 606 Amortization Calculator: User Guide
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Step 1: Check if Amortization is Required
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(Optional — can skip directly to Step 2 if you're already aware amortization applies)
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Start by entering high-level deal details to determine whether your sales commissions need to be amortized under ASC 606 rules:
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• Contract Length (in months): Input the full duration of the customer agreement
  
• Deal Type: Select whether it’s a SaaS Subscription, Usage-Based deal, One-Time Sale, or another type
  
• Commission Type: Choose whether the commission was earned from a New Sale, Renewal, Upsell, or Cross-Sell
  
  

After entering this information, the calculator will assess whether ASC 606 amortization rules apply and guide you to the next step if applicable.
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💡 Tip: If you already know the commissions must be amortized, you can skip this step and jump to Step 2.
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Step 2: Input Commission and Deal Details
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This is where you enter the specifics of your deal and commission arrangement:
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• Deal Size ($): Enter the total contract value
  
• Commission Rate (%): Input the percentage of commission paid on the deal
  
• Contract Length (in months): This will automatically carry over from Step 1 or can be entered manually
  
• Start Month and Start Year: These define when amortization begins
  
• Early Termination: If the deal was terminated before the full contract period, toggle this on and enter the number of months completed before termination
  
  

Once all inputs are filled, click the "Calculate" button to proceed.
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Step 3: View Amortization Results
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The calculator instantly generates your ASC 606 amortization schedule. Results include:

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• Total Commission Payable: The full commission earned based on deal size and rate
  
• Monthly Amortization Amount: The amount of commission expensed each month, evenly distributed across the contract term (unless terminated early)
  
• Remaining Balance: Commission yet to be recognized as expense
  
• Amortization Chart: A visual breakdown showing how amortization and cumulative recognition progress each month
  
• Amortization Table: A detailed monthly breakdown including:
  
  

Month Date Monthly Amortization Cumulative Amortization Remaining Balance

This format gives finance teams a clear, auditable view of how commissions are expensed in compliance with ASC 606.
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Step 4: Export to Excel
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After reviewing the results, click "Export to Excel" to download the full amortization schedule. The exported file can be used for financial reporting, audits, or internal documentation.

Why Use an ASC 606 Amortization Calculator?

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ASC 606 mandates that companies expense sales commissions over the life of the customer contract, rather than upfront. This standard was designed to align expense recognition with revenue recognition. But for finance teams, it can introduce unnecessary complexity and manual work.

An amortization calculator streamlines this process by:

• Automatically calculating commission amortization schedules based on deal length and structure
  
• Helping you stay compliant with revenue recognition rules without relying on spreadsheets
  
• Giving both finance and RevOps teams a clear, visual breakdown of commission expense over time
  
• Supporting faster decision-making when designing new commission plans
  
  

Who Should Use This Calculator?

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This tool is designed for:

• Finance teams responsible for ASC 606 compliance and reporting
  
• Sales operations and RevOps professionals working on commission plan design
  
• Controllers and FP&A teams preparing monthly and quarterly financials
  
• Sales managers and reps seeking transparency into how commissions are expensed
  
  

Whether you are designing a new plan, processing commissions, or reconciling monthly expenses, this calculator can save hours of manual work.
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Best Practices for Using the ASC 606 Calculator

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• Always enter accurate contract start dates and contract lengths to ensure amortization aligns with reporting periods
  
• Use early termination settings to account for deals that were canceled early or churned
  
• Model multiple scenarios to evaluate how different deal structures or commission types affect your financials
  
• Download and save your amortization schedules regularly for audits or reconciliations
  
• Communicate clearly with sales teams about how commissions are amortized if payouts are tied to ASC 606 schedules
  
  

What is ASC 606?

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ASC 606 is a revenue recognition standard established by the Financial Accounting Standards Board (FASB). It requires companies to recognize the cost of obtaining a customer contract—such as sales commissions—over the period in which the related revenue is recognized.

This means commissions earned for multi-year contracts must be amortized monthly over the duration of the contract, not expensed all at once.

Failing to apply this rule correctly can result in:
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• Financial reporting inaccuracies
  
• Audit risks
  
• Delayed or rejected filings
  
• Internal confusion across finance and sales teams
  
  

Key Benefits of the Calculator

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• Fast amortization results without spreadsheets
  
• Accurate monthly breakdowns aligned with ASC 606 rules
  
• Graphical representation of amortization amounts
  
• Audit-ready exportable tables
• Saves time and reduces compliance risk