Industry-Specific Revenue Standard Implementation Guidance Proposed
On July 3, the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee released four working drafts on the Financial Accounting Standards Board’s revenue recognition standard. The working drafts are tailored to the following four industries:
- Airlines. Working Draft: Airlines Revenue Recognition Implementation Issue #2-1: Regional Contracts addresses capacity purchase agreements established by major airlines with regional carriers to reach smaller markets. The working draft applies the guidance in Topic 840, Leases, to the aspects of a capacity purchase agreement that are not deemed leases. In addition, the working draft instructs air carriers how Topic 606, Revenue From Contracts With Customers, is to be employed to review the various portions of a capacity purchase agreement.
- Casino/Gaming. Working Drafts: Gaming Revenue Recognition Implementation Issue #6-5: The Timing for Recognition of the WAP Operator’s Liability for Base Progressive and Incremental Progressive Jackpot Amounts deals with contracts between casinos and wide area progressive operators that control slot machines and related gaming equipment on a revenue-sharing basis.
- Health Care. Working Draft: Health Care Revenue Recognition Implementation Issue #8-8: Consideration of FASB ASC 606, Revenue From Contracts With Customers, for Third-Party Settlement Estimates covers the guidance under ASC 606-10-32, Revenue From Contracts With Customers — Overall — Measurement, regarding arrangements health care providers have with government programs such as Medicare or Medicaid, and the post-care fee corrections.
- Telecommunications. Working Draft: Telecommunications Recognition Implementation Issue #15-10: Miscellaneous Fees discusses whether government funds that provide voice and data access to poorly served communities, allocated customer fees to support construction, payment from property developers for telecommunications network access, and numerous other fees are within the standard’s scope. The definition of a customer employed under Topic 606, Revenue From Contracts With Customers, is cited, and says that fees originating from parties or individuals outside of the definition should generally be accounted for by other U.S. GAAP requirements.
Comments on the working drafts are due Friday, September 1.
Topics: AICPA, Airlines, American Institute of Certified Public Accountants "AICPA", FASB, Financial Accounting Standards Board "FASB", Financial Reporting Executive Committee "FinREC", Gaming, Health Care, Proposed Implementation Issues, Revenue from Contracts with Customers (Topic 606), Revenue Recognition, Telecommunications, U.S. GAAP, Working Drafts