Changes to FASB Revenue Recognition Standard Proposed
Updates are in the works regarding Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The proposed ASU, Technical Corrections and Improvements to Update No. 2014-09, Revenue from Contracts with Customers (Topic 606): Additional Corrections, includes amendments impacting certain aspects of the Financial Accounting Standards Board’s (“FASB”) landmark standard.
Per its proposed amendments, the FASB aims to:
- Clarify that guarantee fees under the scope of Topic 460, with the exception of product or service warranties, are not under the scope of Topic 606, Revenue from Contracts with Customers;
- Provide a better connection between the analysis in Example 38, Case B and the receivables presentation guidance under Topic 606;
- Remove the term “contract liability” in Example 40 due to confusion regarding whether a refund liability is to be categorized as a contract liability; and
- Reinstate guidance on the accumulation of advertising costs in Subtopic 340-20 and replaced by ASU 2014-09.
Comments on the proposed changes are due Tuesday, October 4.