Working Drafts Offer Revenue Recognition Guidance for Telecommunications Suppliers
Revenue recognition implementation guidance could be on the way for telecommunications providers. Last week, the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee issued two working drafts offering industry-specific guidance for adopting the Financial Accounting Standards Board’s Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers.
Proposed Issue #15-1– Portfolio Accounting, proposes that a telecommunications supplier can use the portfolio accounting shortcut when a large disparity does not exist when accounting for contracts jointly rather than individually. The draft guidance advises what suppliers should consider when deciding whether to use the portfolio approach.
The second working draft, Proposed Issue #15-4– Accounting for Contract Costs, helps businesses identify incremental costs related to procuring a contract with a customer. The draft guidance discusses how to evaluate a contract’s incremental costs in order to be deferred under the revenue recognition standard.
Comments on the working drafts are due Saturday, October 1.