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The New Revenue Recognition Standard — Step 2: Identify the Performance Obligations

As mentioned in our previous blog , on May 28th the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers: Topic 606. The new standard creates a whole new codification topic (ASC 606) and ushers in a new era of revenue recognition by replacing hundreds of pages of industry specific guidance with a single comprehensive standard applicable to virtually all industries, and will significantly change how we recognize revenue. ASU 2014-09 isn’t effective for private entities until reporting periods beginning after December 15, 2017, but will be effective for public entities a year earlier. ASC. Read More.

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The New Revenue Recognition Standard — Step 1: Identify the Contract with a Customer (Part II)

As mentioned in our previous blog , on May 28th the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers: Topic 606. The new standard creates a whole new codification topic (ASC 606) and ushers in a new era of revenue recognition by replacing thousands of pages of industry specific guidance with a single comprehensive standard applicable to virtually all industries, and will significantly change how we recognize revenue. ASU 2014-09 isn’t effective for private entities until reporting periods beginning after December 15, 2017, but will be effective for public entities a year earlier. ASC. Read More.

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The New Revenue Recognition Standard: Step 1 – Identify the Contract with a Customer (Part I)

As mentioned in our previous blog , on May 28th the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers: Topic 606 The new standard creates a whole new codification topic (ASC 606) and ushers in a new era of revenue recognition by replacing hundreds of pages of industry specific guidance with a single comprehensive standard applicable to virtually all industries, and will significantly change how we recognize revenue. ASU 2014-09 isn’t effective for private entities until reporting periods beginning after December 15, 2017, but will be effective for public entities a year earlier. ASC. Read More.

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Unbilled Accounts Receivable: Real or Imagined Assets?

Unbilled accounts receivable (A/R) represents recorded revenue that has not yet been billed on a contract. There can be many different reasons for having unbilled A/R recorded on the balance sheet (B/S). Government contractors with cost reimbursable contracts tend to have greater unbilled accounts that stay on the B/S longer. The most common reasons for unbilled A/R are the following: Timing differences: These can exist due to the normal timeframe of processing employee timesheets and invoices through the accounting system. These amounts should be billed as soon as possible in accordance with contractual terms. Rate variances: These can exist when. Read More.

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AICPA Issues Alert on Revenue Recognition Standard

Offering guidance to practitioners implementing the joint Financial Accounting Standards Board (“FASB”) and International Accounting Standards Board (“IASB”) standard, Revenue from Contracts with Customers, the American Institute of Certified Public Accountants (“AICPA”) recently issued Understanding Revenue Recognition: Changes to U.S. GAAP . The alert includes: a summary and overview of FASB’s Accounting Standards Update (ASU) No. 2014-09 , Revenue from Contracts with Customers (Topic 606), and IASB’s IFRS 15 , Revenue from Contracts with Customers; advice on helping entities transition to the new standard; AICPA’s learning and implementation plan; and a mapping tool chronicling key revenue recognition matters. The ASU 2014-09 amendments are effective for public entities during annual reporting periods starting after December 15,. Read More.

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Financial Reporting and Audit Task Force Struggles in First Year

With July marking its first anniversary, the U.S. Securities and Exchange Commission’s (“SEC”) Financial Reporting and Audit Task Force is reflecting on the past year’s accomplishments. Unfortunately, the group has little to celebrate. To this point, task force investigations have not led SEC lawyers to charge anyone for fraud. Despite the slow start, SEC officials have discovered companies with faulty financial reporting controls and fragile application of accounting standards in areas that are usually sources of fraud like revenue recognition and expense recording. At a June 11th question-and-answer session in Washington, D.C., SEC Enforcement Division head Andrew Ceresney also acknowledged. Read More.

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