Revenue recognition: How will the new standard impact financial institutions?
FINANCIAL INSTITUTIONS INSIGHTS |
In May, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) issued substantially converged final standards on revenue recognition. The FASB’s Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), provides a robust framework for addressing revenue recognition issues and will replace almost all existing revenue recognition guidance in current U.S. generally accepted accounting principles (GAAP) upon its effective date. While the effects of the new revenue recognition guidance on the financial statements of reporting entities in the financial institution industry will be somewhat limited because, for the most part, financial instruments and related contractual rights and obligations are excluded from its scope, sources of income for these institutions other than interest income could be affected by the new revenue recognition guidance.
Even though delayed effective dates are provided in the ASU, it is not too early to gain an initial understanding of how the revenue recognition of financial institutions could be affected by the new guidance. To help you gain this understanding, read our summary, Revenue recognition: How will the new standard impact financial institutions?, located at Revenue recognition: Industry insights.
A white paper that details new guidance in ASC 606, including scope, core principle, key steps, transition methods and effective dates.