FASB Amends Disclosure Rule for Revenue Standard
Recently approved technical corrections to the Financial Accounting Standards Board’s (“FASB”) upcoming revenue recognition standard include a disclosure break for companies in the technology, entertainment, and payment card processing industries. The exemption will give some companies a pass in reporting the remaining contractual obligations to a customer before they receive payments. Sales-based or usage-based royalties for intellectual property licenses and variable consideration distributed to distinct goods or services would qualify for the break. Termed a “practical expedient” in the Proposed Accounting Standards Update No. 2016-240, Technical Corrections and Improvements to Update 2014-09, Revenue From Contracts With Customers (Topic 606), the. Read More.
FinREC Publishes Three Revenue Standard Working Drafts
The American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”) has issued the following working drafts in regard to the Financial Accounting Standards Board’s revenue recognition standard, Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers: Proposed Implementation Issues for Revenue Recognition: Telecommunications — Disclosure and Transition. This working draft concerns the required disclosures under Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. The draft guidance notes that a disclosure presented due to another accounting standard does not need to be repeated to fulfill ASC 606. The draft also details several disclosure requirements under ASC. Read More.
Nonprofits Still Unsure of Grants Guidance for Revenue Standard
Facing implementation of the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard in 2019, nonprofits are uncertain whether government grants and related contracts with government entities or foundations are to be classified as exchange transactions or contributions. The issue was the center of discussion at the September 8 meeting between the FASB and its Not-for-Profit Advisory Council, along with how the conditions and restrictions on such contributions should be distinguished. The meeting was part of the accounting board’s effort to streamline implementation of Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (Topic 606). While the landmark standard outlines. Read More.
FASB Nonprofit Council to Discuss Standard-Setting Projects
A web conference is scheduled today involving the Financial Accounting Standards Board (“FASB”) and its Not-for-Profit Advisory Committee (the “Committee”). The meeting will provide the Committee an opportunity to discuss recent accounting issues impacting nonprofit organizations. Committee members will also have a chance to offer feedback on the FASB’s latest projects. In particular, the FASB wants the Committee’s input on projects such as the revenue recognition of grants and contracts, nonprofit limited partnerships consolidation, and the proposed amendments to the disclosure of net periodic pension costs and net periodic postretirement benefit costs. The board is also interested in how nonprofit. Read More.
Topics: FASB, Financial Instruments - Credit Losses (Topic 326), Financial Instruments—Overall (Subtopic 825-10), Leases (Topic 842), Limited Partnerships Consolidation, Net Periodic Pension Costs, Net Periodic Postretirement Benefit Costs, Revenue from Contracts with Customers (Topic 606)
FASB Reviews Ongoing and Future Projects
Several projects received attention at the Financial Accounting Standards Board’s (“FASB”) August 31 meeting. Last week’s board meeting featured staff research updates on the following potential projects: Accounting for service concession arrangements Collaborative arrangements Scope of modification accounting in Topic 718, Compensation─Stock Compensation The FASB also redeliberated its proposed Accounting Standards Update, Technical Corrections and Improvements to Update No. 2014-09, Revenue from Contracts with Customers (Topic 606); discussed the revenue recognition of grants and contracts by nonprofits; and reached conclusions on the proposed guidance updates for long-duration contracts. More on the tentative board decisions from the August 31 meeting is available at FASB.org.
Guidance for Contributions to Nonprofits to be Revisited
Unable to reach conclusions last month on its guidance for nonprofits regarding contributions and exchange transactions, the Financial Accounting Standards Board (“FASB”) is expected to continue to discuss the issue at future meetings. The FASB’s Not-for-Profit Advisory Committee previously said that nonprofit organizations needed better guidance to comply with ASC 958-605 for contributions and the forthcoming requirements under Topic 606, Revenue From Contracts With Customers, for exchange transactions. Panel members said that accounting practices are usually inconsistent among nonprofits when determining if funds received should be treated as contributions or exchange transactions. Many organizations have had difficulty interpreting the guidance. Read More.