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Updates to FASB Revenue Recognition Standard Issued

The Financial Accounting Standards Board (“FASB”) has announced an Accounting Standards Update (“ASU”) featuring technical improvements to 13 areas of the guidance under ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Issued as ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, the amendments impact the following areas:

  • Loan guarantee fees
  • Impairment testing related to contract costs
  • Interaction of impairment testing related to contract costs with guidance in other topics
  • Provisions for losses on construction-type and production-type contracts
  • Scope of Topic 606
  • Disclosure of remaining performance obligations
  • Disclosure of prior-period performance obligations
  • Contract modifications example
  • Contract assets versus receivables
  • Refund liability
  • Advertising costs
  • Fixed-odds wagering contracts in the casino industry
  • Cost capitalization for advisors to private funds and public funds

Public companies must apply the amendments to annual reporting periods, and interim periods within, starting after December 15, 2017. All other entities must apply the amendments to annual reporting periods starting after December 15, 2018, and interim periods within annual reporting periods starting after December 15, 2019.

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