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Interpretive Guidance Updated for Revenue Recognition

New interpretive guidance is available regarding revenue recognition. On August 18, the Securities and Exchange Commission (“SEC”) issued Release No. 33-10402, Commission Guidance Regarding Revenue Recognition for Bill-and-Hold Arrangements, which advises public companies to abandon the guidance for bill-and-hold transactions under Accounting and Auditing Enforcement Release (“AAER”) No. 108, In the Matter of Stewart Parness, once they start applying Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. Until then, companies should continue using guidance under AAER No. 108. Another interpretive release issued was Release No. 33-10403, Updates to Commission Guidance Regarding Accounting for. Read More.

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SEC Staff Experiences Uptick in Revenue Standard Implementation Questions

As public companies prepare to implement Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (ASC 606), they are increasingly turning to Securities and Exchange Commission (“SEC”) staff members for implementation guidance. It is being reported that submitted questions concerning the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard increased by one-third last year, largely due to public companies needing assistance with financial reporting. One question submitted to the SEC involves revenue from credit cards. A company asked for guidance on its decision to record revenue from interchange fees that a merchant’s bank pays to the cardholder’s bank. Speaking. Read More.

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Three Revenue Recognition Working Drafts Published

The American Institute of Certified Public Accountants’ (“AICPA”) Financial Reporting Executive Committee (“FinREC”) recently published the following working drafts featuring proposed implementation guidance for Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606): Engineering & Construction Contractors, Issue #4-4: Uninstalled Materials. This working draft covers accounting for items acquired for a construction project but are not immediately installed. Depository and Lending Institutions Revenue, Issue #5-1; Scope Issues. This working draft covers how guidance under Topic 606 is applied to credit card annual fees, deposit-related charges, and servicing and sub-servicing income. Power & Utility Entities, Issue #13-2: Requirements. Read More.

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Revenue Recognition Implementation: Getting Into the Details

By: Craig Hunter , Partner In our last newsletter, we discussed the highlights of the new revenue recognition standard and what everyone should begin to expect. In this article and future articles, we want to go into more detail about the specific requirements of the standard. As mentioned in the previous edition, the Financial Accounting Standards Board (“FASB”) released Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers: Topic 606. The new standard creates a whole new codification topic (ASC 606), and introduces in a new era of revenue recognition by replacing hundreds of pages of industry specific guidance with a. Read More.

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SEC Gives Certain Companies Additional Year to Adopt Key FASB Standards

Securities and Exchange Commission (“SEC”) Deputy Chief Accountant Sagar Teotia has announced that companies that fail to meet the public business entity definition, separate from being required to include financial statements with their filings of public business entities, will receive an additional year to adopt the Financial Accounting Standards Board’s (“FASB”) revenue recognition and lease standards. Decided at the FASB’s Emerging Issues Task Force meeting last week, Teotia said his staff will not object to the affected companies complying with Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers (Topic 606), and ASU No. 2016-02, Leases (Topic 842),. Read More.

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Industry-Specific Revenue Standard Implementation Guidance Proposed

On July 3, the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee released four working drafts on the Financial Accounting Standards Board’s revenue recognition standard. The working drafts are tailored to the following four industries: Airlines. Working Draft: Airlines Revenue Recognition Implementation Issue #2-1: Regional Contracts addresses capacity purchase agreements established by major airlines with regional carriers to reach smaller markets. The working draft applies the guidance in Topic 840, Leases, to the aspects of a capacity purchase agreement that are not deemed leases. In addition, the working draft instructs air carriers how Topic 606, Revenue From Contracts With Customers, is to be employed to review the various. Read More.

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