Brokers and Dealers in Securities 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:

  • Jeannine Hyman, Citigroup, Inc. (Chair)
  • Jeffrey Alfano, Oppenheimer & Co. Inc.
  • Timothy Bridges, Goldman, Sachs & Co
  • Joseph Cascio, Ernst & Young LLP
  • Chris Donovan, Deloitte LLP
  • Craig Goodman, Marks Paneth LLP
  • Chris Johnson, Crowe Horwath LLP
  • Michael Fehman, Deutsche Bank AG
  • Lisa Koehl, JPMorgan Chase
  • Prashant Nisar, Grant Thornton LLP
  • Karl Ruhry, KPMG LLP
  • Jonathan Schubach, Jeffries LLC
  • David Shelton, Morgan Stanley
  • Mike Szafraniec, PricewaterhouseCoopers LLP
  • Ryan Van Wingerden, Wells Fargo
  • Tracy Whetstone, RSM US LLP
Staff Contact: Ivory Bare, ivory.bare@aicpa-cima.com

IDENTIFIED REVENUE RECOGNITION IMPLEMENTATION ISSUES

Below is a list of potential revenue recognition implementation issues identified by the Brokers and Dealers in Securities Revenue Recognition Task Force. The list will be updated as the task force continues it 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 Commission Income
This implementation issue will discuss considerations for broker-dealers in applying the guidance in ASC 606 to trade-based commission income earned by providing trade facilitation, execution, clearance and settlement, custody, and trade administration services to its customers.
Finalized and included in the AICPA Guide Revenue Recognition
1A Commission Income - Trade Date vs. Settlement Date
This implementation issue will discuss whether the trade execution performance obligation satisfied on the trade date or the settlement date.
Finalized and included in the AICPA Guide Revenue Recognition
2 Selling and Distribution Fee Revenue
This implementation issue discusses how the new standard may affect revenue recognition of selling and distribution fees by broker-dealers or distributors. The fees discussed may be paid at the front-end, back-end, or structured as a combination. In addition, the accounting for various costs incurred by broker-dealers and distributors will be discussed.
Re-submitted to AICPA RRWG
3 Costs associated with underwriting
This implementation issue will discuss how a broker-dealer should account for the costs associated with underwriting services; specifically, the presentation of such expenses either on a gross (principal) or net (agent) basis.
Out for Exposure until May 1, 2017
3a. Costs associated with investment banking advisory services
This implementation issue will discuss considerations for broker-dealers in applying the guidance in ASC 606 when costs are incurred to obtain a contract to provide advisory services to a customer.
Finalized and included in the AICPA Guide Revenue Recognition

4 Underwriting and related fee income
This implementation issue will discuss the accounting for underwriting fee revenue under FASB ASC 606.
Submitted to AICPA RRWG
5 Advisory fee income
This implementation issue will discuss when to recognize investment banking advisory fees under the scope of FASB ASC 606.
Submitted to AICPA RRWG
6 Soft dollar revenues
This implementation issue will discuss recognition of revenue earned from soft dollar arrangements.
Out for Exposure until November 1, 2017
7 Revenue from financial instruments (out of scope)
This implementation issue will discuss clarification that the recognition of realized and unrealized gains and losses on proprietary transactions involving the purchase and sale of financial instruments and interest and dividend income on financial instrument contracts held by broker dealers are excluded from the scope of FASB ASC 606.
Finalized and included in the  AICPA Guide Revenue Recognition

 


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 ivory.bare@aicpa-cima.com by the dates noted below:

Issue # Comment Due Date
3-3 - Principal vs. Agent: Costs Associated with Underwriting May 1. 2017
3-3A - Costs Associated with Advisory Services May 1. 2017
 3-6 - Soft Dollar Revenue November 1, 2017


The Brokers and Dealers in Securities Revenue Recognition Task Force and the Stockbrokerage and Investment Banking Expert Panel recommend the following AICPA products for current revenue recognition issues:



A A A


 
© 2017 Association of International Certified Professional Accountants. All rights reserved.