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.
By: Brynn McNeil, Partner Revenue is critically important in the financial statements of companies. Thus, revenue recognition remains a priority for regulators and the accounting profession as a whole. Implementing the new revenue recognition standard, Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, will likely be the most significant and comprehensive change in many years for most companies. The core principle of FASB ASC 606 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for. Read More.
Topics: Accounting Standards Codification, Accounting Standards Update, AICPA, AICPA Audit & Accounting Guide, American Institute of Certified Public Accountants "AICPA", FASB, Financial Accounting Standards Board "FASB", Revenue Recognition
FinREC Releases Working Drafts for Implementing Revenue Standard
Last week, the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”) issued industry-specific working drafts featuring proposed guidance for implementing Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, by the Financial Accounting Standards Board (“FASB”). The working drafts, which could be added to Audit and Accounting Guide: Revenue Recognition, are as follows: Aerospace and Defense Revenue Recognition Implementation Issue # 1-5: Transfer of Control on Non-US Federal Government Contracts — Clarification on Whether a Contract Priced at a Loss Could Qualify for Over Time Recognition in Accordance with FASB ASC 606-10-25-27(c): This proposal clarifies FinREC. Read More.
Topics: Accounting Standards Update "ASU", Aerospace, Audit and Accounting Guide: Revenue Recognition, FASB, Financial Reporting Executive Committee "FinREC", FinREC, Gaming, Health Care, insurance, Revenue From Contracts With Customers, Revenue Recognition, Telecommunications
Private Company Advocacy Group Seeks Additional Revenue Standard Guidance
As private companies prepare to comply next year with the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard, the American Institute of Certified Public Accountants’ Private Companies Practice Section (“PCPS”) seeks relief from the accounting changes. In its January 17 letter to the FASB, the PCPS requested permission for private companies to use less constricting interpretations for certain aspects of FASB Accounting Standards Codification 606, Revenue From Contracts With Customers. The PCPS believes the FASB’s landmark standard impacts private companies by requiring strong consideration of recognition and measurement disparities and disclosure differences for specific conduit debt obligors. Accordingly, the PCPS. Read More.
SEC Official Asks Public Companies to Focus on Key FASB Standards
Securities and Exchange Commission (“SEC”) official Michael Dusza is advising public companies to consider how the adoption of several standards from the Financial Accounting Standards Board (“FASB”) could impact their financial reporting controls. During a speech last month in Washington D.C., Dusza stressed that the accounting changes for revenue recognition, leases, and credit losses are likely to create significant challenges when public companies test internal controls during the adoption phase. Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers (Topic 606), is effective January 1, 2018 for public business entities. ASU No. 2016-02, Leases (Topic 842), will be. Read More.
Topics: COSO, Credit Losses, FASB, Financial Accounting Standards Board "FASB", Financial Instruments - Credit Losses (Topic 326), Internal Control Reporting, Internal Controls, lease accounting, Leases (Topic 842), Public Companies, Revenue Recognition, SEC, Securities and Exchange Commission "SEC"
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.