Decisions Reached on Accounting for Partial Sales of Nonfinancial Assets
The Financial Accounting Standards Board (“FASB”) recently reviewed the project on clarifying the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, which is part of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). During its February 17th meeting, the FASB decided not to offer explicit guidance regarding the sales of undivided interests in Subtopic 610-20. The FASB also decided to maintain consistency with Topic 606 and require the assessment of control to be reviewed from the counterparty’s perspective. For transition purposes, the FASB decided that Subtopic 610-20 will go into. Read More.
FASB Makes Slight Changes to Collectibility Test
A key part of the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard received some minor adjustments at the standard setter’s February 10th meeting. After considering feedback that asked for simpler guidance in regard to Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, the FASB agreed to clarify some aspects of the collectibility threshold. However, the FASB decided not to make any significant changes to the test for determining the likelihood of collecting customer payments. Rather, the board confirmed that it must be “probable” for customers to meet their payments before a company tallies its revenue. With. 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.
Will New Revenue Standards on Customer Contracts Impact You?
By: Sara Crabtree , Manager, Government Contractor Services Group U.S. Generally Accepted Accounting Principles (GAAP), as codified in the Accounting Standards Codification, does not provide one, all-inclusive general standard on revenue recognition that applies across the board to all transactions and entities. Companies follow various subtopics in the Codification or industry specific standards to determine the proper procedures for recognizing revenue. That will all change for contracts with customers once new revenue recognition standards go into effect. In May 2014, the International Accounting Standards Board (“IASB”) and Financial Accounting Standards Board (“FASB”) issued new requirements on recognizing revenue that derives from customer-based. Read More.
Topics: Accounting Standards Codification, Accounting Standards Update "ASU", Financial Accounting Standards Board "FASB", International Accounting Standards Board "IASB", International Financial Reporting Standards "IFRS", Topic 606, U.S. GAAP
FASB and IASB Discuss Changes to Principal versus Agent Considerations
During its joint meeting on December 16th, the Financial Accounting Standards Board (“FASB”) and International Accounting Standards Board (“IASB”) redeliberated proposed amendments to the principal versus agent guidance. The meeting was in response to feedback received on the boards’ exposure drafts, FASB Proposed Accounting Standards Update, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), and IASB Exposure Draft, Clarifications to IFRS 15. During redeliberations, the FASB and IASB reached tentative decisions in regard to the following: Principle for determining whether an entity is a principal or an agent; Unit of account for. Read More.
The New Revenue Recognition Standard: Step 5 Recognize Revenue as the Performance Obligations are Satisfied
As mentioned in our previous blogs , on May 28th the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers: Topic 606 creating a whole new codification topic (ASC 606). The new standard ushers in a new era of revenue recognition by replacing thousands of pages of industry specific guidance with a single comprehensive standard applicable to virtually all industries, and will significantly change how we recognize revenue. ASU 2014-19 isn’t effective for private entities until reporting periods beginning after December 15, 2017, and will be effective for public entities a year earlier. ASC 606. Read More.