United States

It’s official: Effective date of new revenue guidance deferred by one year

FINANCIAL REPORTING INSIGHTS  | 

On August 12, 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This ASU: (a) defers the effective date of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), by one year for both public and nonpublic entities and (b) allows early adoption of the ASU by all entities as of the original effective date for public entities.

Consistent with ASU 2014-09, the revised effective dates will be different for public entities and nonpublic entities. Public entities include: (a) public business entities, (b) not-for-profit entities that have issued, or are conduit bond obligors for, securities that are traded, listed or quoted on an exchange or an over-the-counter market and (c) employee benefit plans that file or furnish financial statements with or to the SEC. Nonpublic entities include all entities other than public entities. The original effective date and early adoption provisions and revised effective date and early adoption provisions in ASU 2014-09 for both public and nonpublic entities are as follows:

Effective date of ASU 2014-09

 

As originally issued

As revised by ASU 2015-14

Public entities

Annual reporting periods beginning after December 15, 2016, and the interim periods within that year

Annual reporting periods beginning after December 15, 2017, and the interim periods within that year

Example:
Calendar year end

Quarter and year beginning January 1, 2017

Quarter and year beginning January 1, 2018

Nonpublic entities

Annual reporting periods beginning after December 15, 2017, and the interim periods within annual periods beginning after December 15, 2018

Annual reporting periods beginning after December 15, 2018, and the interim periods within annual periods beginning after December 15, 2019

Example:
Calendar year end

Year ending December 31, 2018 and interim periods in 2019

Year ending December 31, 2019 and interim periods in 2020

 

Early adoption provisions of ASU 2014-09

 

As originally issued

As revised by ASU 2015-14

Public entities

Prohibited

Permitted in annual reporting periods beginning after December 15, 2016, and the interim periods within that year (which was the original effective date for public entities)

Nonpublic entities

Permitted in any of the following periods: (a) an annual reporting period beginning after December 15, 2016 or 2017, and the interim periods within that year or (b) an annual reporting period beginning after December 15, 2016, and the interim periods within annual periods beginning after December 15, 2017

Permitted in any of the following periods: (a) an annual reporting period beginning after December 15, 2016, and the interim periods within that year or (b) an annual reporting period beginning after December 15, 2016 and the interim periods within annual reporting periods beginning one year after the annual reporting period in which the new guidance is first applied

 

For information about the status of other pending changes to ASU 2014-09, refer to our summary, Revenue recognition: In motion.