Asset Management Revenue Recognition Task Force 


AICPA Revenue Recognition Task Forces are charged with developing revenue recognition implementation issues that will provide helpful hints and illustrative examples for how to apply the new Revenue Recognition Standard.

Task Force Members:

  • Chad B. Gazzillo, KPMG LLP (Chair)
  • Mike Barkman, Ernst & Young LLP
  • Rajan Chari, Deloitte & Touche LLP
  • Heather L. Harris, BlackRock, Inc
  • Timothy J. Lorber, Legg Mason & Co., LLC
  • Christopher May, PricewaterhouseCoopers LLP
  • Lindsey Oshita, Franklin Resources, Inc.
  • Tracy Whetstone, RSM US LLP
Staff Contact: Irina Portnoy, irina.portnoy@aicpa-cima.com

IDENTIFIED REVENUE RECOGNITION IMPLEMENTATION ISSUES

Below is a list of potential revenue recognition implementation issues identified by the Asset Management Revenue Recognition Task Force. The list will be updated as the task force continues its discussions. Full revenue recognition implementation issues will be posted below for informal comments after review by the AICPA Financial Reporting Executive Committee (FinREC).

Issue # Description of Implementation Issue Status
1 Who is the Customer?
This implementation issue will discuss considerations needed when assessing whether a contract exists between an asset manager and customer, and identifying who the customer is (the investor or the fund)?
Finalized  and included in the AICPA Guide Revenue Recognition
2 Management fee revenues
Recognition of management fee revenue. This implementation issue will discuss when and how to recognize revenue from management fees, including unitary fees, under the new model.
Out for Exposure until August 1, 2017
3 Fee waivers / Fund Expense Reimbursements
Accounting for management fee waivers and customer expense reimbursements. This implementation issue will discuss how to account for management fee waivers and customer expense reimbursements in asset management contracts.
Out for Exposure until August 1, 2017
4 Costs of managing investment companies
This implementation issue discusses how asset managers should account for the costs related to managing an investment company.
Out for Exposure until November 1, 2017
5 Incentive or performance fee revenues (excluding carried interest)
This implementation issue discusses how and when incentive or performance revenue, excluding carried interest, should be recognized under the new standard.
Out for Exposure until August 1, 2017
5A
Incentive-based capital allocations
This implementation issue raises the question of whether incentive-based capital allocations, such as carried interest, fall within the scope of FASB ASC Topic 606 or FASB ASC Topic 323, Investments—Equity Method and Joint Ventures.
Out for Exposure until August 1, 2017
6 Recognition of Contingent Deferred Sales Charges
This implementation issue evaluates the criteria used to recognize revenue from CDSC under the new guidance, including the identification of separate performance obligations and variable consideration.
Finalized and included in the AICPA Guide Revenue Recognition
7 Deferred distribution commission expenses ("back-end load funds")
This implementation issue will discuss how an asset manager (or its mutual fund distributor subsidiary) should account for commissions paid to a mutual fund distributor for back-end load funds. This implementation issue will discuss considerations for applying the guidance in FASB ASC 340 to deferred distribution commission expenses.
Finalized and included in the AICPA Guide Revenue Recognition
8 Identifying the Contract
This implementation issue discusses what are some considerations when identifying the contract with a customer.
Finalized and included in the AICPA Guide Revenue Recognition
9 Asset Management Arrangement Revenue Gross versus Net
This implementation issues discusses considerations for determining when an asset manager should be considered a principal or an agent.

Submitted to FinREC - July 2017


FEEDBACK REQUESTED

Draft Revenue Recognition Implementation Issues included for informal comment, when available, will be listed below.

Respondents should submit any comments including the implementation issue number to irina.portnoy@aicpa-cima.com by the dates noted below:

Issue # Comment Due Date
10-2 - Management Fee Revenue
August 1, 2017
10-3 - Management Fee Waivers
August 1, 2017
10-4 - Costs of Managing Investment Companies 
 November 1, 2017
10-5 - Incentive Fees, Excluding Carried Interest
August 1, 2017
10-5A - Incentive Based Capital Allocations
August 1, 2017


The Asset Management Revenue Recognition Task Force and the Investment Companies Expert Panel recommend the following AICPA products for current revenue recognition issues:



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