United States

SEC updates guidance on revenue recognition

FINANCIAL REPORTING INSIGHTS  | 

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which, upon its effective date, replaces most pre-existing revenue recognition guidance, including industry-specific guidance, in current U.S. generally accepted accounting principles. As a result, the SEC recently updated its interpretive guidance regarding revenue recognition by releasing the following:

The above updates apply upon a registrant’s adoption of ASC 606, and until such time, registrants should continue referring to the extant guidance. Implementation of ASC 606 must occur no later than the quarter and year beginning January 1, 2018, for public entities with a calendar year end. Public entities include public business entities and certain not-for-profit entities and employee benefit plans. For all other entities with a calendar year end, implementation must occur no later than the year ending December 31, 2019.

Information regarding the FASB’s new revenue recognition guidance is available in our Revenue Recognition Resource Center.