ASC 606 and non-GAAP frameworks
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ASC 606 and non-GAAP frameworks

3 years ago · 351.4 KB Download

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Part of the CPEA ASC 606: Revenue Recognition Series

Due to the time, cost, and resources necessary to implement the new revenue standard, some clients may decide that using a special purpose framework to prepare the financial statements is a cost-effective alternative to adopting the new revenue standard. Ultimately, however, the use of a special purpose framework would depend on the users of the client’s financial statements and whether those users would accept financial statements prepared using a framework other than U.S. generally accepted accounting principles (U.S. GAAP).

In the first part of this resource, we explain the key differences in revenue recognition between the new revenue standard (referred to as FASB ASC 606), the tax basis, and the AICPA’s Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs).

The second part of this resource is based on a number of member inquiries from CPEA members questioning whether the disclosures required by the new revenue standard are applicable if financial statements are prepared under special purpose frameworks (SPF), such as the income tax basis of accounting. This question relates to a broader issue that practitioners involved with SPFs often grapple with — communicating in the SPF financial statements the substance of required U.S. Generally Accepted Accounting Principles (U.S. GAAP) disclosures. In this resource we cover multiple key questions related to revenue recognition disclosures and understanding SPFs.

Download the ASC 606 recognition differences report

File name: CPEA-606-tax-differences.pdf

Download the ASC 606 disclosures in SPF report

File name: CPEA-606-spfs.pdf

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