Engineering & Construction Contractors 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:

  • Mike Sobolewski, PricwaterhouseCoopers LLP (Co-Chair)
  • Tim Wilson, BKD LLP (Co-Chair)
  • John Armour, CBIZ
  • James Brant, Deloitte
  • Reed Brimhall, URS
  • Michael Desormeaux, Grant Thornton LLP
  • Bill Patt, Mortenson Construction
  • Erin Roberts, Ernst & Young LLP
  • Michael Samson, KPMG LLP
  • Geoff Sanders, Jacobs
  • Alison Spivey, Ernst & Young LLP
  • Louis Torres, BDO LL
  • Cynthia Vandenberg, Fluor
  • Darrin Weber, IMA 
  • John Weber, McGladrey LLP
Staff Contact: Fred Gill, fgill@aicpa.org
IDENTIFIED REVENUE RECOGNITION IMPLEMENTATION ISSUES

 

Below is a list of potential revenue recognition implementation issues identified by the Engineering & Construction Contractors 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 Identifying the Unit of Account (including combining contracts, loss of segmentation guidance, options, separate performance obligations)
This implementation issue will discuss how to determine the unit of account for recognition of revenue and margin for engineering and construction contracts, including combining of contracts, segmenting of contracts, and identifying performance obligations.
Out for Exposure until September 1, 2016
2 Variable Consideration / Estimation Method (including claims, change orders (unpriced and unapproved), incentives, penalties, extras, liquidated damages, back charges, collectability)
This implementation issue will discuss what are the factors to consider in estimating the amount of variable consideration to which an entity will be entitled, and how an entity should determine the amount of estimated variable consideration to include in the transaction price.
Out for Exposure until September 1, 2016
3 Acceptable measures of progress (including when each measure is acceptable to use, Accounting for Service Contracts, Wasted Materials)
This implementation issue will discuss what are acceptable measures of progress for Engineering & Construction contracts that are performance obligations satisfied over time.
Out for Exposure until September 1, 2016
4 Time value of money
5 Uninstalled materials / customer furnished materials/equipment (including gross v. net considerations)
5a.
Question to TRG - Uninstalled materials
Question submitted to FASB TRG
6 General allocation issues
7 Consideration of existing Alternative A and B concepts
8 Contract costs (including pre-contract costs, costs that qualify for capitalization, fulfilment costs, and warranties)
9
Disclosures
10
Transition Issues


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 fgill@aicpa.org by the dates noted below:


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 ccole@aicpa.org by the dates noted below:

Issue # Comment Due Date
4-1 - Identifying the Unit of Account (including combining contracts, loss of segmentation guidance, options, separate performance obligations) September 1, 2016
4-2 - Variable Consideration / Estimation Method (including claims, change orders (unpriced and unapproved), incentives, penalties, extras, liquidated damages, back charges, collectability) September 1, 2016
4-3 - Acceptable measures of progress (including when each measure is acceptable to use, Accounting for Service Contracts, Wasted Materials) September 1, 2016


The Engineering & Construction Contractors Revenue Recognition Task Force recommends the following AICPA products for current revenue recognition issues:
News and Other Resources
  • In this blog post, Reed Brimhall and Michael Sobolewski, co-chairs of the Engineering & Construction Contractors Revenue Recognition Task Force, outline their top concerns regarding the new standard.



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