Companies Warned About Workload of Implementing Revenue Standard
As the 2018 effective date for the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard approaches, companies in the latter stages of the implementation process caution that the undertaking is extensive and complicated. Those insights were shared by company representatives at the recent Financial Executives International’s Current Financial Reporting Issues conference in New York. Christine DiFabio of Zoetis, Inc. said Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers (Topic 606), is all encompassing. She also noted that implementation takes a significant effort that could require assistance from all parts of an organization. Newly appointed Securities and Exchange Commission Chief Accountant Wesley Bricker made similar remarks, saying both. Read More.
FASB Says to Use Judgment When Applying Revenue Standard
Companies will have to make a judgment call when recording revenue from customer contracts over time when the Financial Accounting Standards Board’s (“FASB”) revenue standard becomes effective in 2018. That was the message members of the FASB’s Transition Resource Group (“TRG”) stressed during last week’s discussion on Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers. FASB assistant project manager Aaricka Friend commented that the standard makes it very clear that revenue is to be recorded from the moment when a business meets its obligations to a customer. TRG members also said that the timing could change, so companies. Read More.
FASB Amends Disclosure Rule for Revenue Standard
Recently approved technical corrections to the Financial Accounting Standards Board’s (“FASB”) upcoming revenue recognition standard include a disclosure break for companies in the technology, entertainment, and payment card processing industries. The exemption will give some companies a pass in reporting the remaining contractual obligations to a customer before they receive payments. Sales-based or usage-based royalties for intellectual property licenses and variable consideration distributed to distinct goods or services would qualify for the break. Termed a “practical expedient” in the Proposed Accounting Standards Update No. 2016-240, Technical Corrections and Improvements to Update 2014-09, Revenue From Contracts With Customers (Topic 606), the. Read More.
FinREC Publishes Three Revenue Standard Working Drafts
The American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”) has issued the following working drafts in regard to the Financial Accounting Standards Board’s revenue recognition standard, Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers: Proposed Implementation Issues for Revenue Recognition: Telecommunications — Disclosure and Transition. This working draft concerns the required disclosures under Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. The draft guidance notes that a disclosure presented due to another accounting standard does not need to be repeated to fulfill ASC 606. The draft also details several disclosure requirements under ASC. Read More.
Nonprofits Still Unsure of Grants Guidance for Revenue Standard
Facing implementation of the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard in 2019, nonprofits are uncertain whether government grants and related contracts with government entities or foundations are to be classified as exchange transactions or contributions. The issue was the center of discussion at the September 8 meeting between the FASB and its Not-for-Profit Advisory Council, along with how the conditions and restrictions on such contributions should be distinguished. The meeting was part of the accounting board’s effort to streamline implementation of Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (Topic 606). While the landmark standard outlines. Read More.
Companies Urged to Speed up Revenue Standard Implementation Plans
Financial Accounting Standards Board (“FASB”) and International Accounting Standards Board (“IASB”) officials are asking companies to hasten implementation plans for the boards’ revenue recognition standards. The FASB and IASB are close to wrapping up revisions to Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, and International Financial Reporting Standards 15, Revenue From Contracts With Customers, and want companies to prepare for implementation with the mindset that no further changes are coming. Public entities must implement the new standards in 2018; public entities and nonprofit organizations will have comply in 2019.