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.
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.
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.
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.
IASB Vice Chair Denounces FASB’s Separate Agenda
After working with the Financial Accounting Standards Board (“FASB”) for 12 years on merging U.S. GAAP and International Financing Accounting Standards (IFRS), the International Accounting Standards Board’s (“IASB”) Ian Mackintosh recently criticized the FASB for its decision to stray from their original course of action. Speaking at the IFRS Foundation Conference on June 23rd, the IASB Vice Chair acknowledged the successes of IFRS adoption in over 100 nations, but condemned the FASB for diverging from the goal of creating a single set of global standards. In his speech, Mackintosh called out FASB Vice Chair James Kroeker for comments perceived as. Read More.
Topics: Convergence, Financial Accounting Foundation "FAF", Financial Accounting Standards Board "FASB", Global Standards, Ian Mackintosh, International Accounting Standards Board "IASB", International Financial Reporting Standards "IFRS", James Kroeker, Mary Jo White, Revenue Recognition, U.S. GAAP
Revenue Recognition Will Never Be the Same
It has taken over five years of debate to develop, but on May 28th the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers: Topic 606, creating a new codification topic and ushering in a new era of revenue recognition. This new standard is a major achievement of the International Accounting Standards Board (“IASB”) and FASB joint project to converge U.S. GAAP and International Financial Reporting Standards (“IFRS”). With this release, the FASB has now replaced hundreds of industry specific guidance pages with a single, comprehensive standard applicable to virtually all industries that. Read More.
Topics: Accounting Standards Update "ASU", Financial Accounting Standards Board "FASB", International Accounting Standards Board "IASB", International Financial Reporting Standards "IFRS", Revenue Recognition