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.
More Revenue Recognition Clarifications Proposed
The Financial Accounting Standards Board (“FASB”) has proposed another set of clarifications to its revenue recognition standard. Issued as the proposed Accounting Standards Update (“ASU”), Technical Corrections and Improvements to Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), the clarifications impact the following issues under ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606): Preproduction costs associated with long-term supply arrangements Contract costs related to impairment testing Contract costs related to the interaction of impairment testing with guidance in other topics Provisions for losses on construction-type and production-type contracts The scope of Topic 606 Disclosure of remaining. Read More.
SEC Staff Observer Comments Rescinded
The Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting. The Update rescinds Securities and Exchange Commission (“SEC”) paragraphs in accordance with the following SEC Staff Observer comments, which are related to Topic 605, Revenue Recognition, and Topic 932, Extractive Activities—Oil and Gas, upon the effective date of Topic 606, Revenue from Contracts with Customers: Revenue and Expense Recognition for Freight Services in Process in paragraph. Read More.
Revenue Recognition Narrow-Scope Amendments and Practical Expedients Issued
The Financial Accounting Standards Board has issued Accounting Standards Update (“ASU”) No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. ASU No. 2016-12 clarifies guidance in certain areas and adds practical expedients. The updated guidance and practical expedients in the amendments include the following: Assessing the Collectibility Criterion in Paragraph 606-10-25-1(e) and Accounting for Contracts That Do Not Meet the Criteria for Step 1 (Applying Paragraph 606-10-25-7). ASU No. 2016-12 clarifies the collectibility criterion in Step 1, and adds a new criterion to paragraph 606-10-25-7 which clarifies when revenue is recognized for a contract that. Read More.
FASB Updates Revenue Recognition Guidance
The Financial Accounting Standards Board (“FASB”) recently issued Accounting Standards Update (ASU) No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments clarify guidance in Topic 606 for identifying performance obligations in a contract and the licensing of intellectual property. Public entities must apply the new guidance for annual reporting periods, and interim periods therein, starting December 15, 2017. Early application is permitted for public entities as of annual reporting periods, and interim periods therein, starting December 15, 2016. Nonpublic entities have a one-year deferral of the effective date. More on the issuance of ASU No. 2016-10 is available on. Read More.
Results from April 18th Revenue Recognition TRG Meeting
Earlier this week, the Revenue Recognition Transition Resource Group (“TRG”) held a meeting to discuss the issues regarding the implementation of Topic 606, Revenue from Contracts with Customers, and International Financial Reporting Standards 15, Revenue from Contracts with Customers. Staff members and the TRG agreed on the following matters: Memo No. 50, Scoping Considerations for Incentive-based Capital Allocations. Incentive-based capital allocations are within the scope of Topic 606. Memo No. 51, Contract Asset Treatment in Contract Modifications. A contract asset is sustained in the new modified contract and recognized under the new modified contract similar to receivables, resulting in prospective accounting.. Read More.