AccountingLink

Revenue recognition

28 January 2014

To the Point - Board issues final guidance for service concession arrangements
The FASB issued final guidance stating that entities should not account for certain service concession arrangements entered into with public-sector entities as leases under ASC 840, Leases, and should not recognize the related infrastructure as property, plant and equipment. Instead, entities should refer to other US GAAP, such as ASC 605, Revenue Recognition, to account for these arrangements. While the final guidance is effective for annual periods beginning after 15 December 2014, early adoption is permitted. Our To the Point publication summarizes what you need to know about the new final guidance.

5 December 2013

To the Point - It’s time to start preparing for the new revenue standard
With the new revenue standard expected early in 2014, companies should begin preparing now. The new standard will likely affect their financial statements, business processes and personnel, and internal control over financial reporting, and implementing it could be a significant undertaking. Our To the Point discusses what you can do now to prepare for a successful implementation.

31 October 2013

To the Point - Boards conclude redeliberations on revenue recognition proposal
In response to concerns raised by constituents during drafting of their joint revenue recognition standard, the FASB and the IASB this week decided to set thresholds for collectibility and the constraint on variable consideration and to clarify the accounting for revenue from licenses of intellectual property. The Boards will now work to finalize the standard. Our To the Point publication summarizes these decisions.

19 September 2013

To the Point - Boards’ deliberations on remaining topics delay final revenue standard
In response to concerns raised by constituents, the Boards this week continued to discuss how the joint revenue recognition standard will address collectibility, the constraint on variable consideration and the accounting for revenue from licenses of intellectual property. They decided that further discussions are necessary. As a result, we do not expect the standard to be issued until late this year at the earliest. Our To the Point publication summarizes the discussion at this week’s meetings.

25 July 2013

To the Point - Boards near completion of the revenue recognition standard
The FASB and the IASB this week clarified how aspects of variable consideration and collectibility will be addressed in the standard. The Boards also addressed how entities should determine whether a contract meets the criteria to be within the scope of the guidance and the accounting for contracts that are not in the scope of the guidance. Our To the Point publication summarizes these decisions.

29 May 2013

To the Point - Revenue recognition for credit card rewards and in-substance real estate
The FASB and the IASB tentatively agreed that the new revenue recognition standard will not specifically address credit card reward programs. The FASB also clarified that the new standard should be applied to transfers of in-substance nonfinancial assets to noncustomers. Our To the Point publication summarizes these decisions.

21 March 2013

Technical Line - Final revenue standard is taking shape
The FASB and the IASB have substantially completed their redeliberations on a comprehensive new revenue recognition standard, which will be effective for annual periods beginning on or after 15 December 2016 for public entities with a one-year deferral for nonpublic entities. This publication summarizes the Boards’ decisions to date and discusses the remaining topics the Boards must address.

21 February 2013

To the Point - Boards revisit disclosure, transition and effective date for revenue standard
The FASB and the IASB tentatively decided that entities could retrospectively adopt their new revenue standard or adopt it on a modified retrospective basis for annual reporting periods beginning on or after 1 January 2017. The Boards also addressed several disclosures they proposed in 2011. Our To the Point publication summarizes these decisions.

31 January 2013

To the Point - Boards address various industry-specific issues in revenue proposal
The FASB and the IASB continue to make progress on their joint proposal on revenue recognition. At their meeting this week, the Boards addressed the application of the proposed guidance to certain transfers of assets, the scope of the proposed standard, including for financial services contracts and collaborative arrangements, accounting for contracts with customers that contain repurchase agreements and the effect of the proposed standard on asset managers. Our To the Point publication summarizes the decisions and provides an update on the Boards’ redeliberation plan.

20 December 2012

To the Point - Boards check a few more items off their list in revenue redeliberations
The FASB and the IASB continue to make progress on their joint proposal on revenue recognition. At a meeting this week, the Boards addressed accounting for contract acquisition costs, constraining the cumulative amount of revenue recognized for licensed intellectual property and allocating the transaction price (including the effect of the allocation on some bundled arrangements). Our To the Point publication summarizes the decisions and provides an update on the Boards’ redeliberation plan.

19 December 2012

Technical Line - Accounting for income from the sale of patents
Many technology companies seek to monetize their intangible intellectual property assets by selling a patent or a portfolio of patents. Because these arrangements can be complex, determining when and how to account for the proceeds can require significant judgment. Our Technical Line publication highlights various factors that should be considered when accounting for the sale of patents.

29 November 2012

To the Point - Boards explore a new direction on license arrangements
The FASB and IASB tentatively decided that licenses of intellectual property would be treated as either “rights” transferred to a customer at a point in time or promises to provide “access” over time, depending on the nature of the license. We encourage companies to consider the indicators the Boards’ staffs have developed to determine the nature of a license and to share their views about whether the approach is operational if they have concerns.

29 November 2012

To the Point - Some health care entities may have to move bad debt expense - again
The FASB and IASB tentatively decided that the effects of customer credit risk would be presented prominently as a separate line item in operating expense, rather than adjacent to revenue as previously proposed. Our To the Point publication summarizes how this decision in the joint revenue recognition project would affect health care entities.

27 November 2012

Comment Letter - More implementation guidance needed in a final revenue standard
In a recent comment letter, we applauded the FASB and the IASB for their commitment to smooth implementation of a final revenue standard. However, we recommended that the Boards provide additional implementation guidance to avoid diversity in practice.

21 November 2012

To the Point - Licenses constrain progress on revenue redeliberations
The FASB and the IASB continue to redeliberate their joint proposal on revenue recognition. At a meeting this week, they made progress on how to address collectibility and the proposed constraint on variable consideration. However, they acknowledged that more work is needed on how to recognize revenue from licenses of intellectual property and directed their staffs to conduct additional outreach on whether an approach they are exploring is operational. Our To the Point publication summarizes the decisions and provides an update on the Boards’ redeliberation plan.

1 September 2012

Financial Reporting Developments - Software: Revenue recognition
We have updated our FRD to clarify our guidance and reflect evolving industry practice for questions 3-19, Establishment of VSOE of fair value of PCS or other services subsequent to the outset of the arrangement, 7-11, Approaches to establishing VSOE of fair value of PCS and 9-3, Accounting for PCS services included in arrangements accounted for using contract accounting.

24 May 2012

To the Point - Boards to reconsider key issues in revenue recognition project
Our To the Point publication summarizes significant comment letter themes and discussions at recent roundtables hosted by the Boards and the Boards’ proposed redeliberation plan. The Boards have targeted early 2013 for issuance of a final standard.

24 May 2012

To the Point - Media and entertainment entities raise key issues in revenue recognition project
The Boards discussed comment letters they received on their joint revenue recognition proposal as well as the redeliberation plan proposed by their staffs. Our To the Point publication focuses on comment letter themes from the media and entertainment industry. The Boards have targeted early 2013 for issuance of a final standard.

24 May 2012

To the Point - Technology entities raise key issues in revenue recognition project
The Boards discussed comment letters they received on their joint revenue recognition proposal as well as the redeliberation plan proposed by their staffs. Our To the Point publications focuses on comment letter themes from the technology industry. The Boards have targeted early 2013 for issuance of a final standard.

23 May 2012

Financial Reporting Developments - Revenue recognition: Multiple element arrangements
We have updated our Financial Reporting Developments publication, Revenue recognition – Multiple element arrangements, to include additional implementation guidance related to liquidated damages, determining the best estimate of selling price and capitalized costs in a revenue transaction.

22 March 2012

Technical Line - Recognizing revenue on the sale of virtual goods
Many publishers of social games, virtual worlds and popular multiplayer online role playing games offer games free of charge and give players the opportunity to purchase virtual goods to enhance their game-playing experience. Our Technical Line describes the revenue recognition methods available to account for the sale of virtual goods. It also addresses the factors to consider when selecting an accounting policy for revenue recognition on the sale of virtual goods, as well as gross versus net recognition considerations.

15 March 2012

To the Point - More work needed on revenue recognition
In our comments to the Boards on their latest revenue recognition proposal, we say the Boards have made significant progress addressing the concerns raised by constituents about their initial proposal. However, we believe the Boards need to reconsider some aspects of the proposal and consider providing additional implementation guidance to promote consistent application.

13 March 2012

Comment Letter - Joint re-proposal on revenue recognition
We continue to support the Boards’ intention to develop a converged revenue recognition standard for IFRS and US GAAP. While we believe the Boards have made significant progress addressing the concerns raised by constituents about their 2010 exposure draft, more work needs to be done to enable consistent application.

27 February 2012

Technical Line - The revised revenue recognition proposal - real estate
This industry-specific publication supplements our Technical Line, Double-exposure: The revised revenue recognition proposal, and highlights some of the more significant implications that the latest revenue recognition proposal may have on the real estate industry.

16 February 2012

Technical Line - The revised revenue recognition proposal - automotive
This industry-specific publication supplements our Technical Line, Double-exposure: The revised revenue recognition proposal, and highlights some of the more significant implications that the latest revenue recognition proposal may have on the automotive sector.

2 February 2012

Technical Line - The revised revenue recognition proposal - life sciences
This industry-specific publication supplements our Technical Line, Double-exposure: The revised revenue recognition proposal, and highlights some of the more significant implications that the latest revenue recognition proposal may have on the life sciences industry.

2 February 2012

Technical Line - The revised revenue recognition proposal - oil and gas
This industry-specific publication supplements our Technical Line, Double-exposure: The revised revenue recognition proposal, and highlights some of the more significant implications that the latest revenue recognition proposal may have on the oil and gas industry.

1 February 2012

Technical Line - The revised revenue recognition proposal - aerospace and defense
This industry-specific publication supplements our Technical Line, Double-exposure: The revised revenue recognition proposal, and highlights some of the more significant implications that the latest revenue recognition proposal may have on the aerospace and defense industry.

12 January 2012

Technical Line - Aggregating milestone method disclosures may sometimes be appropriate
Many life sciences companies adopted Accounting Standards Update 2010-17, Milestone Method of Revenue Recognition, for the first time in their 2011 financial statements. The standard requires disclosures at the individual milestone level. While we believe entities should provide these disclosures for each material milestone, it may be appropriate for life sciences entities to aggregate disclosures for immaterial milestones. Our Technical Line publication provides questions to consider when assessing the materiality of milestones for disclosure.

12 January 2012

Technical Line - The revised revenue recognition proposal - health care
This industry-specific publication supplements our Technical Line, Double-exposure: The revised revenue recognition proposal, and highlights some of the more significant implications that the latest revenue recognition proposal may have on the health care industry.

12 January 2012

Technical Line - The revised revenue recognition proposal - software and cloud services
This industry-specific publication supplements our Technical Line, Double-exposure: The revised revenue recognition proposal, and highlights some of the more significant implications that the latest revenue recognition proposal may have on the software and cloud services.

5 January 2012

To the Point - Surprises lurk in the proposed revenue recognition model
In conjunction with its November 2011 re-exposure of the joint revenue recognition proposal, the FASB recently issued a draft of the proposed consequential amendments to the Accounting Standards Codification (the Codification). The proposed amendments include not only the proposed changes to Topic 605, Revenue Recognition, but also the changes to the guidance that resides outside of Topic 605.

22 December 2011

Technical Line - Revenue recognition proposal - media and entertainment
This industry-specific publication supplements our Technical Line, Double-exposure: The revised revenue recognition proposal, and highlights some of the more significant implications that the latest revenue recognition proposal may have on the media and entertainment industry.

22 December 2011

Technical Line - Revenue recognition proposal - retail and consumer products
This industry-specific publication supplements our Technical Line, Double-exposure: The revised revenue recognition proposal, and highlights some of the more significant implications that the latest revenue recognition proposal may have on the retail and consumer products industries.

22 December 2011

Technical Line - Revenue recognition proposal - telecommunications
This industry-specific publication supplements our Technical Line, Double-exposure: The revised revenue recognition proposal, and highlights some of the more significant implications that the latest revenue recognition proposal may have on the telecommunications industry.

21 December 2011

Practical matters for the c-suite - Revenue recognition project: second time’s a charm?
Our new edition of Practical matters for the c-suite, Revenue recognition project: second time’s a charm?, complements our recent Technical Line and To the Point publications on the changes to last year’s exposure draft on revenue recognition. This publication also explores in more detail how the revised exposure draft would affect an organization’s finance, tax, IT systems and business processes.

15 December 2011

Technical Line - Revenue recognition proposal - asset management
This industry-specific publication supplements our Technical Line, Double-exposure: The revised revenue recognition proposal,and highlights some of the more significant implications that the latest revenue recognition proposal may have on the asset management industry. In coming weeks, we will issue additional industry-specific publications that will address, in further detail, how the proposal would affect those industries.

12 December 2011

Technical Line - Double-exposure: the revised revenue recognition proposal
The FASB and IASB recently re-exposed their joint revenue recognition proposal, which would converge revenue recognition guidance under US GAAP and IFRS into a single model and replace essentially all revenue recognition guidance. While the overall framework is the same as in the 2010 exposure draft (ED), key parts of the proposal have changed. Some changes move the proposal closer to US GAAP than the 2010 ED. Others would significantly change current practice for some companies.

14 November 2011

To the Point - A new proposal for revenue recognition
The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) (collectively, the Boards) issued a revised joint proposal to create a single, global revenue recognition model. While the overall framework is the same as in the 2010 exposure draft (ED), key parts of the proposal have changed. Some changes move the proposal closer to US GAAP than the 2010 ED. Others would significantly change current practice for some companies. Our To the Point publication highlights changes from the 2010 ED and current practice.

28 July 2011

Technical Line - A snapshot of the new joint revenue model
The Boards have completed their redeliberations on their revenue recognition proposal and plan to issue a second exposure draft due to the significant changes they made to the model they proposed last year. Our Technical Line summarizes the revised model based on our understanding of the tentative decisions the Boards reached during their redeliberations. We also compare the guidance in the original exposure draft to the guidance we expect in the upcoming exposure draft.

15 June 2011

To the Point - Boards to re-expose revenue proposal
The FASB and the IASB decided to formally expose their joint revenue recognition proposal for a second time because they have made significant changes to the model they proposed last year. Our To the Point explains what you need to know about this decision and other recent changes the Boards have made to their proposal.

18 April 2011

Technical Line - Another step toward a final revenue standard
Our Technical Line summarizes the key conclusions reached by the FASB and IASB at the end of April 2011 on its revenue recognition project.

6 April 2011

Technical Line - New revenue recognition model is taking shape
The FASB and the IASB have made significant revisions to their joint revenue recognition proposal to address constituents’ concerns. Our Technical Line summarizes significant changes made as a result of redeliberations.

1 December 2010

Revenue recognition under IFRS - what do respondents think of the proposed changes
Our publication outlines our main observations from a study performed on the responses to the joint IASB/FASB proposal on revenue recognition.

19 November 2010

Hot Topic - Revenue recognition - FASB and IASB discuss redeliberation plan
Our Hot Topic provides a summary of the FASB and IASB staff update on the status of the joint revenue recognition project.

17 November 2010

Technical Line - Revenue recognition - estimating selling price
Our Technical Line provides guidance on factors to consider when making the best estimate of selling price under the new multiple-element model for revenue recognition.

27 October 2010

Technical Line - Any future for sell-through accounting?
Our Technical Line highlights the potential implication of the proposed FASB and IASB revenue recognition model on sell-through accounting. Under the proposed model, certain entities may conclude that recognition of revenue upon the transfer of control of the product to the distributor or reseller is appropriate.

8 September 2010

Revenue: Will your key performance measure change?
Our Practical Matters highlights the effects the revenue recognition proposal would have on areas such as financial metrics, systems, tax, and stakeholder communications.

1 August 2010

Financial Reporting Developments - The road to convergence: the revenue recognition proposal
Our FRD outlines the principles in the FASB and IASB joint proposal on revenue recognition and highlights some of the more significant implications of the proposed revenue recognition model.

30 June 2010

Technical Line - Effects of the new multiple-element revenue guidance on cloud computing vendors
Our Technical Line provides an overview of the amendments in ASU 2009-13 and describes how these amendments may affect cloud computing arrangements.

25 June 2010

Hot Topic - FASB proposes single revenue recognition model
The FASB and the IASB released their joint proposal to create a single, converged revenue recognition model. The proposed model outlines the principles entities should apply in recognizing revenue from contracts to provide goods and services to their customers. Our publication summarizes the proposal and points out the common components of revenue transactions that will be changed by the proposed guidance, including product warranties and contingent consideration.

9 April 2010

Hot Topic - Revenue recognition on the sale of virtual goods
Virtual goods are non-physical objects within the game represented by pictures, animations or three-dimensional objects. Many online game operators facilitate the sale of virtual goods by incorporating a virtual currency within the online game. Our Hot Topic focuses on the different revenue recognition methods applicable to the sale of virtual goods for cash (or purchased virtual currency) in a free-to-play game environment.

2 April 2010

Technical Line - Milestone method of revenue recognition codified in US GAAP
Our Technical Line provides a summary of the key provisions of the consensus reached in EITF Issue 08-9 related to the milestone method of revenue recognition.

23 December 2009

Technical Line - Status update - Joint revenue recognition project
Our Technical Line provides an update on the decisions the Boards have made on the joint revenue recognition project.

25 September 2009

Hot Topic - Changes in revenue recognition for tangible products that include software
Our Hot Topic summarizes EITF Issue 09-3. This updated guidance is expected to significantly affect how entities account for revenue arrangements that contain both hardware and software elements.

25 September 2009

Hot Topic - Revisions to revenue recognition: multiple-element arrangements guidance finalized
Our Hot Topic summarizes EITF Issue 08-1. EITF 08-1 updates the existing multiple-element arrangements guidance and is expected to significantly affect these entities with these arrangements.

19 June 2009

Comment Letter - Preliminary views on revenue recognition in contracts with customers
This comment letter provides our views on the IASB/FASB Preliminary Views on revenue recognition.

29 April 2009

Technical Line - Revenue recognition project preliminary views
Our Technical Line summarizes the initial decisions made in the Boards’ joint revenue recognition project, which has the potential to significantly change how and when many entities recognize revenue.

10 April 2009

Hot Topic - EITF consensus-for-exposure on the milestone method of revenue recognition
Our Hot Topic outlines the consensus-for-exposure for EITF 08-9, “Milestone Method of Revenue Recognition.” Under the consensus-for-exposure, a vendor may make an accounting policy election to recognize arrangement consideration that is entirely contingent upon the achievement of a substantive milestone in the period in which the milestone is achieved.

19 December 2008

Hot Topic - Revenue recognition project- preliminary views
Our Hot Topic discusses the FASB and the IASB discussion paper relating to their ongoing joint revenue recognition project. The Discussion Paper seeks comments on the Boards’ preliminary views on a single, asset-and-liability-based revenue recognition model that they believe will improve financial reporting within both US GAAP and IFRS.

3 December 2008

Hot Topic - EITF 08-1-Revenue arrangements with multiple deliverables
Our Hot Topic discusses the consensus-for-exposure reached on EITF 08-1 on revenue recognition with multiple deliverables.

13 August 2008

Hot Topic - FASB-IASB Joint revenue recognition project update
Our Hot Topic focuses on recent FASB and IASB discussions to update the guidance on revenue recognition.

16 June 2008

Hot Topic - FASB-IASB Joint revenue recognition project update
Our Hot Topic focuses on the joint FASB and IASB project on revenue recognition.

9 April 2008

Hot Topic - Accounting for revenue arrangements for software as service vendors
Our Hot Topic sets forth our views and observations relating to many of the accounting issues associated with SaaS arrangements, including specific examples illustrating the key concepts.