We have prepared a white paper, Revenue recognition: Overview of ASC 606, which provides a high-level summary of the guidance in Topic 606, Revenue from Contracts with Customers, of the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC). The guidance in ASC 606 was originally issued by the FASB in May 2014 in Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). Since then, the FASB has issued several ASUs that have revised or clarified the guidance in ASC 606. Our white paper provides a high-level summary of the guidance in ASC 606 (as amended) and highlights many of the fundamental differences between ASC 606 and legacy U.S. generally accepted accounting principles.
While the effective dates for ASC 606 are staggered, they are now upon us. With limited exceptions, the new guidance was effective as of January 1, 2018 for public entities with calendar year ends. For all nonpublic entities with calendar year ends, the new guidance is effective in the year ending December 31, 2019. Time is of the essence for these entities given that implementation of the new guidance could represent a significant undertaking in many cases. For additional information about ASC 606, refer to our publication, A guide to revenue recognition.
Key topics covered in this white paper include:
- A summary of changes incorporated into the new guidance
- Scope of ASC 606
- Core principles and key steps
- Presentation and disclosure requirements
- Effective dates
- Transition methods