FASB Webcast to Focus on Aerospace and Defense Revenue Recognition
On Thursday, the Financial Accounting Standards Board (“FASB”) will host the first in a webcast series discussing how its revenue recognition standard will impact different sectors. The first webcast will focus on the aerospace and defense sector, and feature speakers from the FASB, GE and Raytheon. Panelists will cover the standard’s more significant changes, as well as give attendees the opportunity to ask questions and help shape the new revenue recognition guidance. The hour-long webcast starts at 2 p.m. ET. To attend, register at FASB.org.
FASB Reaches Decisions on Revenue Recognition Guidance for Nonprofits
Progress continues on the Financial Accounting Standards Board’s (“FASB”) project on the revenue recognition of grants and similar contracts by nonprofits. At its Wednesday meeting, the FASB reached decisions on the following matters: The proposed amendments to distinguish between conditional and unconditional contributions will pertain to both a resource provider and a recipient. To satisfy the definition of a “donor-imposed condition,” a right of return or a releasing of the promisor from their responsibility to transfer assets must be present in the agreement. In order to be considered a condition, the agreement must indicate that the recipient is only entitled. Read More.
FASB Member Questions Revenue Standard
Last week during a meeting of the Financial Accounting Standards Board’s (“FASB”) Financial Accounting Standards Advisory Council, FASB member Lawrence Smith expressed uncertainty about Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers. Smith said that implementation of the revenue recognition standard will be of significant costs to companies, and the FASB would’ve been better off making targeted improvements to its revenue guidance instead of a complete rewrite. He also noted that smaller accounting firms and companies do not have experts to help with the standard or Codification. As a result, those firms and companies are making mistakes because they are. Read More.
AICPA Task Forces Issue Revenue Recognition Exposure Drafts
In response to Financial Accounting Standards Board Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, the American Institute of Certified Public Accountants’ (“AICPA”) Revenue Recognition Task Forces have issued ten exposure drafts for public comment. The exposure drafts impact four industries and include the following: Airlines 2-3 – Passenger Tickets – Breakage and Accounting for Travel Vouchers 2-4 – Ancillary Fees and Services 2-5 – Interline Transactions 2-6a & d – Brand Name and Customer List 2-6i – Interline Loyalty Transactions 2-11 – Change Fees Gaming 6-8a – Loyally and Other Incentive Programs without Tier Status Hospitality 7-1 – Franchise Fees 7-2 – Hotel Management Service Arrangements 7-3 – Owned and Leased Property Revenues Timeshare 16-2 – Collectibility Comments on the exposure drafts are due Thursday, June 1.
How Nonprofits Can Address Revenue Recognition Issues
Some companies are beginning to implement the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard and the board’s standard on nonprofit financial reporting. For nonprofits, however, one of the main challenges they face is whether certain revenue transactions are considered contributions or exchange transactions. In addition, when reviewing transactions, what is considered a conditional contribution or an unconditional contribution? For more nonprofits and revenue recognition, visit The Journal of Accountancy. As always, Cherry Bekaert’s Nonprofits group can assist with the implementation of the FASB’s revenue recognition standard and your financial reporting needs.
The New Revenue Recognition World
By: Michael Brown, Senior Manager The effective date for the new revenue recognition standard is fast approaching and will be here before we know it. By now, you have probably heard speculation about the impact of the standard to your company. Speculation has been from no impact at all to the world is going to be entirely different post implementation. As always, the reality is somewhere in the middle. Generally speaking, for the government contracting industry, the end result of when and how much revenue is recognized will be similar as in the past or at least should not significantly. Read More.