In 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) to provide a robust framework and comprehensive principles for addressing revenue recognition issues. Additionally, the guidance on accounting for certain costs related to a contract with a customer in the scope of Topic 606 was codified in ASC 340-40, Other Assets and Deferred Costs – Contracts with Customers.
This white paper, Impact of revenue recognition guidance in ASC 606 on financial institutions, highlights aspects of the guidance that are particularly pertinent for financial institutions, including accounting for:
- Interest and dividend income and fee income on loans (including credit card fees)
- Service charges on deposit accounts
- Servicing and sub-servicing income
- Fees and commissions from fiduciary, securities brokerage, and other activities
- Guarantee fees
- Insurance and investment contracts
- Sales of financial assets
- Sales of foreclosed property
For additional information about all of the revenue recognition guidance, including those aspects discussed in this white paper, as well as numerous examples illustrating how to apply the guidance, refer to our publication, A guide to revenue recognition.