Revenue Recognition

    On May 28, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. The standard will eliminate the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. This standard has the potential to affect every entity’s day-to-day accounting and, possibly, the way business is executed through contracts with customers.

    On August 12, 2015, FASB issued Accounting Standards Update (ASU) No. 2015-14, Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date, formally delaying for one year the effective date of its new revenue recognition standard.

    Exposure Drafts Released 

    The AICPA’s Financial Reporting Executive Committee (FinREC) has issued several working drafts of accounting issues related to the implementation of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, and is requesting your feedback.

    The working drafts discuss helpful considerations for entities, in the aerospace and defense and asset management industries, implementing ASU 2014-09.

    Final revenue recognition implementation issues will be included in a new Revenue Recognition Guide that the AICPA is developing.

    The working drafts of accounting issues are available for:

    The comment period on these exposure drafts has closed.

    Proposed Revenue Recognition Accounting Standards 

    New Resources 

    The AICPA has developed the following new resources for understanding and implementing the new ASU.

    Financial Reporting Brief: Tax Effects of ASU 2014-09

    This Financial Reporting Brief acknowledges that this standard will have a large impact on the financial reporting standards of almost every company (public, private, and not-for-profit). But, what tax consequences could also result? The brief examines this question.

    Financial Reporting Brief: Roadmap to Understanding the New Revenue Recognition Standards

    The Financial Reporting Brief reorganizes the guidance contained in FASB ASC 606 (revenue recognition standard), to follow the five step revenue recognition model along with other guidance impacted by this standard. Additionally, it highlights differences between FASB ASC 606 and IFRS 15, and provides reference to applicable examples in the implementation guidance.

    New Revenue Recognition Accounting Standard—Learning and Implementation Plan

    Use this roadmap to ensure that your company as well as its management team and staff do the following:
    1. Understand the changes to current GAAP based on FASB ASU 2014-09, Revenue from Contracts with Customers
    2. Understand transition and retrospective adoption of the revenue recognition standard, and determine how your company will adopt the new guidance
    3. Find resources to help train your professional staff to ensure effective and efficient implementation of the revenue recognition standard
    4. Educate users about the changes they can expect in your company’s financial statements

    Brief: Revenue Recognition Primer for Audit Committees

    Because the revenue recognition standard will eliminate the transaction- and industry-specific revenue recognition guidance included in current GAAP and replace it with a principle-based approach, it is important for audit committees to gain an understanding of the standard and how it may impact the entity’s revenue recognition. This document will assist audit committees in ensuring the entity is prepared to adopt the standard.

    Introduction to the New Revenue Recognition Standard 

    Kim Kushmerick, AICPA Senior Technical Manager-Accounting Standards, provides an overview of the new revenue recognition standard and highlights helpful AICPA resources available.

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    Industry Task Forces 

    The AICPA has formed sixteen industry task forces to help develop a new Accounting Guide on Revenue Recognition that will provide illustrative examples for how to apply the new Revenue Recognition Standard. The industries involved with this project are:

    The status of select revenue recognition issues identified by the task forces is available for download.

    AICPA Resources - Publications, Webcasts and CPE 

    The AICPA has the following titles under production.
    The AICPA has the following webcasts and CPE available or under production.
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