Revenue Recognition Narrow-Scope Amendments and Practical Expedients Issued
The Financial Accounting Standards Board has issued Accounting Standards Update (“ASU”) No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. ASU No. 2016-12 clarifies guidance in certain areas and adds practical expedients. The updated guidance and practical expedients in the amendments include the following: Assessing the Collectibility Criterion in Paragraph 606-10-25-1(e) and Accounting for Contracts That Do Not Meet the Criteria for Step 1 (Applying Paragraph 606-10-25-7). ASU No. 2016-12 clarifies the collectibility criterion in Step 1, and adds a new criterion to paragraph 606-10-25-7 which clarifies when revenue is recognized for a contract that. Read More.
Public Companies Urged to Use Revenue Standard Panel’s Meeting Minutes
As the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard prepares to take effect in 2018, Securities and Exchange Commission (“SEC”) Chief Accountant James Schnurr is pushing public companies to follow the guidance in the Transition Resource Group’s (“TRG”) meeting minutes when implementing Accounting Standards Update (ASU) No. 2014-09, Revenue From Contracts With Customers. At last week’s SEC Speaks conference, Schnurr said while the TRG’s conclusions are not authoritative, companies should still use them in practice. Additionally, any alternative approach a company takes must be communicated to the SEC. FASB Vice Chairman and TRG Co-Chairman Jim Kroeker praised Schnurr’s comments,. Read More.
Topics: Accounting Standards Update "ASU", American Institute of Certified Public Accountants "AICPA", Financial Accounting Standards Board "FASB", Joint Transition Resource Group for Revenue Recognition, Revenue Recognition, U.S. Securities and Exchange Commission "SEC"
IASB Bows Out of Revenue Standard Advisory Panel
The International Accounting Standards Board (“IASB”) has withdrawn participation from future meetings of the Transition Resource Group (“TRG”), the advisory panel assigned to address questions concerning its revenue recognition standard. Announced last month, the IASB said it was done making changes to International Financial Reporting Standards 15, Revenue From Contracts With Customers, and was ready for businesses to begin the implementation process. Moving forward, the IASB will make itself available for consultation if necessary. In the meantime, the Financial Accounting Standards Board will continue participation with the advisory panel in regard to its revenue recognition standard, Accounting Standards Update No. 2014-09, Revenue From Contracts. Read More.
FASB to Propose Slight Changes to Revenue Standard
As the Financial Accounting Standards Board (“FASB”) prepares its annual project for making technical corrections to U.S. GAAP, the standard setter is concurrently planning to issue a separate proposal featuring minor changes to its revenue recognition standard. The proposed revenue corrections cover several areas, including the clarification of contracts within the scope of Topic 944, Financial Services — Insurance. Hoping to issue the revenue clarifications by the end of March, the FASB decided to release the amendments separately due to the prominence of Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers. Upon release, the proposed changes will have. Read More.
Clarified Guidance on Intellectual Property Licenses Approved
On January 6th, the Financial Accounting Standards Board (“FASB”) approved clarifications to its upcoming revenue recognition standard. Specifically, the clarifications address questions concerning how to account for intellectual property licenses, which is considered one of the complex parts of the FASB and International Accounting Standards Board’s upcoming revenue recognition standards. The FASB has ordered its research staff to draft an update to be published by the end of the first quarter. The amendments will likely be based on Proposed Accounting Standards Update (ASU) No. 2015-250, Revenue From Contracts With Customers (Topic 606): Identifying Performance Obligations and Licensing.