AICPA Revenue Recognition Working Drafts Issued
The American Institute of Certified Public Accountants’ (“AICPA”) Financial Reporting Executive Committee has released the following working drafts concerning revenue recognition guidance: Issue #6-9B, Gaming Entity’s Accounting for Management Contract Revenues, Including Costs Reimbursed by Managed Properties Issue #15-3, Contract Modifications The working drafts propose guidance for implementation matters with the five-step revenue recognition model under Topic 606, Revenue from Contracts with Customers. Specifically, Issue #6-9B relates to the gaming industry and Issue #15-3 focuses on the telecommunications industry. Feedback on both working drafts is due by Monday, July 2.
AICPA and Healthcare Trade Group to Issue Guidance for Revenue Standard
To help healthcare companies with Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (Topic 606), the Healthcare Financial Management Association and the American Institute of Certified Public Accountants are planning to offer additional industry-specific guidance. The interpretive guidance is expected to address when healthcare providers should record revenue from special state funding methods that cover deficits between Medicaid reimbursements and patient care costs. Frustration over recognizing revenue related to provider tax programs was discussed at last month’s meeting between the FASB and the Healthcare Financial Management Association’s Principles and Practices Board. Brian Conner, a national practice leader for hospitals. Read More.
FASB Proposes Improved Collaborative Arrangements Guidance
A newly proposed Accounting Standards Update (“ASU”) by the Financial Accounting Standards Board (“FASB”) offers organizations improved guidance regarding collaborative arrangements. The proposed ASU, Collaborative Arrangements (Topic 808): Targeted Improvements , focuses on changes to generally accepted accounting principles related to collaborative arrangements. One proposed change includes adding unit-of-account guidance under Topic 808, which would align the guidance with Topic 606, Revenue from Contracts with Customers, limited to when a company is reviewing the nature of Topic 606. The FASB also proposes two clarifications, such as defining when certain transactions concerning collaborative participants must be accounted for as revenue under Topic 606 when the collaborative member. Read More.
FASB Simplifies Provisions in Lease Standard
The Financial Accounting Standards Board (“FASB”) has asked its staff to prepare a final draft of an amendment to the board’s lease standard that would simplify how lessors account for specific property leases with recurrent service charges. At its March 28 meeting, FASB members agreed to allow lessors combine receipts from property leases and service income related to those leases by meeting certain requirements. To be accounted for as one, the lease part of the rental arrangement and the service charges need to be bound by the same transfer between the tenant and the landlord. Also, the lease contracts will. Read More.
Limited Proposal Coming for Payments in Collaborative Arrangements
The Financial Accounting Standards Board (“FASB”) plans to issue for public comment a limited proposal that clarifies when to account for payments in collaborative arrangements as revenue. The proposed amendment to Topic 808, Collaborative Arrangements, would state that certain transactions between collaborative partners that are separate from third-party sales can create revenue that is accounted for consistent with Topic 606, Revenue From Contracts With Customers. FASB members unanimously approved releasing the proposal after reviewing feedback from its December workshops with auditors and companies. Members rejected calls for more specific guidance, stating that it would be tough to establish such guidance for. Read More.
FASB to Review Revenue Standard Implementation Costs
The Financial Accounting Standards Board (“FASB”) plans to examine how companies implement its revenue recognition standard when the guidance goes into effect next year. At a December 14 meeting, FASB Chairman Russell Golden stated that the board would undertake a comprehensive review of Accounting Standards Codification 606, Revenue From Contracts With Customers, to adjust its education process for future guidance, boost outreach with financial software providers, and find ways that could reduce implementation costs of significant standards. Golden said the review would focus on companies that have already implemented revenue. In particular, the FASB wants to know what were the. Read More.