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SEC’s Bricker Urges Implementation of Revenue Recognition Standard

Nearly 10 percent of public companies have not started to implement Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (Topic 606). While the percentage is insignificant, Securities and Exchange Commission (“SEC”) Chief Accountant Wesley Bricker is telling unprepared companies they have no option but to begin the implementation process. At a panel discussion during the SEC Speaks conference on February 25, Bricker said that companies cannot overlook the importance of the Financial Accounting Standards Board’s revenue recognition standard and must prepare accordingly. He encouraged companies to communicate their implementation plans with audit committees, executive teams and others, and. Read More.

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Revenue Recognition Draft Guidance Issued for Utilities and Time-Share Companies

The American Institute of Certified Public Accountants’ Financial Reporting Executive Committee has issued the following working drafts to address implementation of Accounting Standards Update No. 2016-09, Revenue From Contracts With Customers, by the Financial Accounting Standards Board (“FASB”): Working Draft: Proposed Implementation Issues for Revenue Recognition: Power & Utility Entities (#13-1): Accounting for Tariff Sales to Regulated Customers. Intended to help power and utility companies with applying ASU No. 2016-09 to revenues caused by regulated utility tariffs, this working draft explains that agreements between utilities and customers for services provided under a regulated tariff must be disclosed as a customer. Read More.

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FASB Clarifies Donor-Imposed Conditions

During a discussion last Wednesday concerning its project on revenue recognition of grants and contracts by nonprofits, the Financial Accounting Standards Board (“FASB”) agreed to refine guidance under Subtopic 958-605, Not-for-Profit Entities—Revenue Recognition. Specifically, the FASB clarified the definition of a “donor-imposed condition” by including the following: A right of return, involving either a return of assets transferred or a release of a promisor from its responsibility to transfer assets. A barrier that must be overcome before the recipient receives transferred or promised assets. Indicators and illustrative examples would help describe a barrier.

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Nonfinancial Assets Guidance to Coincide with FASB Revenue Standard

The Financial Accounting Standards Board’s (“FASB”) latest Accounting Standards Update (“ASU”) clarifies guidance to help determine when gains and losses on nonfinancial assets should be recognized. Issued as ASU No. 2017-05, Other Income—Gains and Losses From the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, the amendments clarify the term “in substance nonfinancial asset” to inform financial reporting professionals which transactions are part of the nonfinancial asset derecognition guidance. The FASB had failed to define the term in ASU No. 2014-09, Revenue From Contracts With Customers (Topic. Read More.

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Revenue Standard Working Drafts Released for Insurers & Software Companies

Two working drafts addressing implementation problems with the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard have been issued by the American Institute of Certified Public Accountants’ (“AICPA”) Financial Reporting Executive Committee: Proposed Implementation Issues for Revenue Recognition: Insurance Entities (#9-1): Considerations for Applying the Scope Exception in FASB ASC 606-10-15-2 and 606-10-15-4 to Contracts Within the Scope of ASC 944. This working draft explains that contracts bound by the financial reporting requirements under FASB Accounting Standards Codification (“ASC”) 944, Financial Services – Insurance, are not impacted by FASB ASC 606, Revenue From Contracts With Customers. Proposed Implementation Issues for. Read More.

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FASB Announces Top Priorities for 2017

After issuing several key Accounting Standards Updates and announcing new board members last year, the Financial Accounting Standards Board (“FASB”) is preparing for a busy 2017. In a five-minute video, FASB Technical Director Sue Cosper outlines the FASB’s top priorities for this year. The FASB’s top priorities for 2017 include: Finalizing the hedging and long-duration insurance standards; Supporting the implementation of its revenue recognition, leases, and credit losses standards; Potential improvements to nonprofit financial reporting, particularly distinguishing between exchanges and contributions; and Redeliberating feedback on the Invitation to Comment and continuing to focus on its Conceptual Framework. Click here to watch the video.

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