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:

  • Michael Fehrman, Deutsche Bank AG (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
  • Jeannine Hyman, Citigroup, Inc.
  • Chris Johnson, Crowe Horwath LLP
  • Michael Kelly, PricewaterhouseCoopers LLP
  • Lisa Koehl, JPMorgan Chase
  • Prashant Nisar, Grant Thornton LLP
  • Jason Roos, Wells Fargo
  • Karl Ruhry, KPMG LLP
  • Jonathan Schubach, Jeffries LLC
  • David Shelton, Morgan Stanley
  • Tracy Whetstone, McGladrey LLP
Staff Contact: Irina Portnoy, iportnoy@aicpa.org

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.
Out for Exposure until January 2, 2017
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.
Out for Exposure until January 2, 2017
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.
Submitted to FinREC - September 2015
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.
Submitted to AICPA RRWG
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.
Submitted to AICPA RRWG
4 Underwriting and related fee income
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
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.
Submitted to FinREC for final clearance – November 2016


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 iportnoy@aicpa.org by the dates noted below:

Issue # Comment Due Date
3-1 - Commission Income
January 2, 2017
3-1A - Commission Income - Trade Date vs. Settlement Date
January 2, 2017
3-7 - Revenue from Financial Instruments (Out of Scope)
September 1, 2016


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:



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