FASB Makes New Improvements to Revenue Recognition Standard
Jan 3rd 2017
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After making several rounds of technical corrections and improvements to its revenue recognition standard over the past year, the Financial Accounting Standards Board (FASB) issued a new batch of changes on Dec. 21 that affect “narrow aspects” of the new guidance.
The amendments in Accounting Standards Update (ASU) 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, will go into effect once the revenue recognition standard takes effect.
Public companies will apply the new guidance to annual and interim reporting periods beginning after Dec. 15, 2017.
Private companies will apply the standard to annual reporting periods beginning after Dec. 15, 2018, as well as interim reporting periods within annual reporting periods beginning after Dec. 15, 2019.
The amendments in the ASU pertain to 13 issues associated with the new standard, which were brought to the board’s attention through a variety of sources, including:
Submissions to the Transition Resource Group for Revenue Recognition.
Stakeholders’ technical inquiries.
The 13 issues addressed in the ASU include:
1. Loan guarantee fees. 2. Impairment testing of contract costs. 3. Interaction of impairment testing with guidance in other topics. 4. Provisions for losses on construction-type and production-type contracts. 5. Scope of Topic 606. 6. Disclosure of remaining performance obligations. 7. Disclosure of prior-period performance obligations. 8. Contract modifications. 9. Contract asset vs. receivable. 10. Refund liability. 11. Advertising costs. 12. Fixed-odds wagering contracts in the casino industry. 13. Cost capitalization for advisors to private funds and public funds.