Forthcoming Revenue Standard Proposal to Help Nonprofits
New Financial Accounting Standards Board (“FASB”) guidance could make it easier for nonprofits to record revenue from grants and donations with restrictions. On June 7, the FASB unanimously agreed on a proposal to help nonprofits differentiate between a condition and a restriction in U.S. GAAP for received grants and donations. Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (Topic 606) removed guidance on “exchange” transactions. Furthermore, many nonprofit organizations have had trouble distinguishing between a condition and restrictions. To address the matter, the FASB will clarify that when a gift comes with a donor-imposed condition, the agreement must. Read More.
Topics: Accounting Standards Update "ASU", Charitable Giving, FASB, Financial Accounting Standards Board "FASB", Nonprofits, Revenue from Contracts with Customers (Topic 606), Revenue Recognition, U.S. GAAP
Survey Reveals Slow Revenue Standard Implementation
Over 70 percent of 300 major public businesses in the U.S. have yet to upgrade their accounting systems in preparation for the Financial Accounting Standards Board’s revenue recognition standard. In a survey conducted by one of the Big Four firms, one-third of respondents said their company are facing implementation challenges and could fall behind schedule. Reasons companies reported for falling behind implementation efforts include insufficient funding or staff, problems interpreting the revenue standard’s technical requirements, and issues collecting data. Public companies have six months to comply with Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers. Survey officials believe. Read More.
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.