Updates to revenue recognition resources for ASU 2017-05
FINANCIAL REPORTING INSIGHTS |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), which added the following new guidance to the Accounting Standards Codification:
- ASC 606, “Revenue from Contracts with Customers”
- ASC 340-40, “Other Assets and Deferred Costs – Contracts with Customers”
- ASC 610-20, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets”
The FASB has made numerous changes to the new guidance since its issuance. Most recently, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which addresses the recognition of gains and losses on the transfer (i.e., sale) of nonfinancial (and in substance nonfinancial) assets to counterparties other than customers. We have updated the following resources to reflect the effects of ASU 2017-05:
- Revenue recognition: Overview of ASC 606, which provides an overview of the new guidance and highlights of the fundamental changes the new guidance will bring to accounting for revenue.
- Revenue recognition: A whole new world, which is a white paper with detailed discussion of the new guidance and highlights of the major differences between the new guidance and legacy generally accepted accounting principles. In addition, Section 4.3 of the white paper provides a detailed discussion of the revised guidance in ASC 610-20 on accounting for transfers of nonfinancial (and in substance nonfinancial) assets, including its scope, accounting model and the applicable effective date and transition guidance.
- Revenue recognition: In motion, which provides information about finalized and pending changes to the new guidance, including the nature of those changes and their status.
These resources provide the information you need to understand, and begin implementation of, the new guidance, the effective dates for which are discussed in detail in our article, Are you sure you know when the revenue guidance in ASC 606 is effective? Given the fast-approaching effective dates of the new guidance, entities should be well on their way to understanding and implementing the new guidance, especially those that are public entities, as well those that plan to elect the full retrospective transition method and have multi-year contract terms with their customers. If you have questions about the new guidance or need implementation assistance, don't hesitate to contact your RSM representative.