AccountingLink

    Revenue recognition

    10 October 2017

    To the Point - How companies should prepare for the audit of the new revenue standard
    The PCAOB issued a staff alert discussing what auditors need to do to audit a company’s implementation of the new revenue recognition standard. While the alert is aimed at auditors, it provides a roadmap for management about how to prepare for the audit of the company’s implementation of the new standard.

    30 August 2017

    Financial Reporting Developments - Revenue from contracts with customers (ASC 606)
    We have updated our Financial reporting developments (FRD) publication, Revenue from contracts with customers (ASC 606), to address changes to SEC and SEC staff interpretive guidance on revenue recognition and the staff’s comment that it wouldn’t object if entities that are public business entities only because their financial statements or financial information is included in another entity’s SEC filing use the private company effective date to adopt the new revenue recognition standard.

    25 August 2017

    Technical Line - How the new revenue standard affects engineering and construction entities
    Our Technical Line highlights key implications of the new revenue standard for engineering and construction entities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    24 August 2017

    Technical Line - Common challenges in implementing the new revenue standard
    Our Technical Line highlights aspects of the revenue recognition standard that some entities are finding particularly challenging to implement and provides examples of how to apply the guidance in these areas. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    11 August 2017

    To the Point - Update on accounting for pre-production and tooling activities and costs under ASC 606
    Manufacturing and production companies in various industries have raised questions about how they should account for activities and costs incurred prior to the production of goods under a supply arrangement after they adopt the new revenue recognition standard. As public companies finalize their ASC 606 accounting policies and prepare to adopt the new standard, a consensus has emerged that a number of views related to the accounting for pre-production and tooling activities could be appropriate.

    3 August 2017

    Technical Line - How the new revenue standard affects life sciences entities
    Our Technical Line highlights key implications of the new revenue standard for life sciences entities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    27 July 2017

    Technical Line - How the new revenue recognition standard affects automotive OEMs
    Our Technical Line highlights key implications of the new revenue standard for automotive OEMs. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    20 July 2017

    Technical Line - How the new revenue standard affects technology entities
    Our Technical Line highlights key implications of the new revenue standard for technology entities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    13 July 2017

    Technical Line - How the new revenue standard may affect a company’s income tax accounting
    As companies prepare to adopt the new revenue recognition standard, they must consider the potential income tax accounting implications. Adoption of the standard may create new temporary differences or require the remeasurement of existing ones, and companies may need to revise their processes and data collection tools to capture any new ones. Tax professionals should be actively involved in implementation discussions to make sure all implications are considered.

    30 June 2017

    Technical Line - How the new revenue standard affects airlines
    Our Technical Line highlights key implications of the new revenue standard for airlines. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    29 June 2017

    Technical Line - How the new revenue recognition standard affects upstream oil and gas entities
    Our Technical Line highlights key implications of the new revenue standard for upstream oil and gas entities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    29 June 2017

    Technical Line - How the new revenue standard affects asset managers
    Our Technical Line highlights key implications of the new revenue standard for asset managers. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    29 June 2017

    Technical Line - How the new revenue standard affects banks
    Our Technical Line highlights key implications of the new revenue standard for banks. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    29 June 2017

    Technical Line - How the new revenue standard affects brokers and dealers in securities
    Our Technical Line highlights key implications of the new revenue standard for brokers and dealers in securities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    29 June 2017

    Technical Line - How the new revenue standard affects downstream oil and gas entities
    Our Technical Line highlights key implications of the new revenue standard for downstream oil and gas entities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    29 June 2017

    Technical Line - How the new revenue standard affects operating real estate entities
    Our Technical Line highlights key implications of the new revenue standard for operating real estate entities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    22 June 2017

    Technical Line - How the new revenue standard affects telecommunications entities
    Our Technical Line highlights key implications of the new revenue standard for telecom entities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    1 June 2017

    Technical Line - How the new revenue standard affects health care entities
    Our Technical Line highlights key implications of the new revenue standard for health care entities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    9 May 2017

    Technical Line - How the new revenue standard affects retail and consumer products entities
    Our Technical Line highlights key implications of the new revenue standard for retail and consumer products entities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    23 February 2017

    Technical Line - How the new revenue standard will affect media and entertainment entities
    This Technical Line highlights how practice will change for media and entertainment entities under the new revenue standard issued by the FASB and the IASB. It addresses the amendments the FASB has made and the discussions of members of the Transition Resource Group for Revenue Recognition on topics of interest to media and entertainment entities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    22 December 2016

    To the Point - FASB issues technical corrections and improvements to the new revenue standard
    The FASB issued 13 technical corrections and improvements on narrow aspects of the guidance it issued in Accounting Standards Update 2014-09. The amendments address questions that stakeholders have raised but don’t change any of the principles in the new revenue guidance. The amendments have the same effective date and transition requirements as the revenue standard. No further changes to the new standard are currently expected before the effective date.

    15 November 2016

    Transition Resource Group for Revenue Recognition items of general agreement
    We have updated our summary of issues on which members of the TRG generally agreed to include the November 2016 FASB TRG meeting. While the TRG members’ views are non-authoritative, entities should consider them as they implement the new standards. For more information about these issues and issues the TRG discussed but did not reach general agreement on, see our To the Point publications on TRG meetings on EY AccountingLink.

    8 November 2016

    To the Point - FASB TRG reaches general agreement on four more revenue recognition issues
    Members of the FASB Transition Resource Group for Revenue Recognition (FASB TRG) reached general agreement on implementation issues involving capitalization and amortization of incremental costs of obtaining a contract, payments to customers, over time revenue recognition and sales- or usage-based royalties that contain minimum guarantees. While this is the last scheduled FASB TRG meeting, FASB Vice Chairman James Kroeker said entities can continue to send the FASB questions about implementation, and more TRG meetings could be scheduled if enough broad questions are received.

    4 October 2016

    Comment letter - FASB’s proposed additional technical corrections and improvements to the new revenue standard
    In our comment letter, we support the FASB’s objective to address additional feedback received from stakeholders and to make other improvements to its new revenue standard. Overall, we believe that the proposed amendments would address the additional concerns raised by constituents, provide more clarity and improve consistency in application. We also recommend additional clarifications.

    29 September 2016

    Financial Reporting Developments - Revenue recognition: Multiple element arrangements
    We have updated our Financial reporting developments publication on multiple element arrangements. Refer to Appendix C of the publication for a summary of the updates.

    29 September 2016

    Financial Reporting Developments - Software: Revenue recognition
    We have updated our Financial reporting developments publication on software revenue recognition.

    7 September 2016

    Technical Line - How the new revenue recognition standard will affect homebuilders
    This Technical Line highlights key aspects of applying the FASB’s standard to homebuilding arrangements, addresses significant changes to current practice and reflects the latest implementation insights for homebuilders. It supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    5 August 2016

    Comment letter - FASB proposal on clarifying the scope of asset derecognition guidance and accounting for partial sales of nonfinancial assets
    In our comment letter, we supported the FASB’s objective to clarify the guidance on how to account for derecognition of nonfinancial assets and in substance nonfinancial assets. We believe the proposed ASU would reduce the cost and complexity of accounting for the derecognition of nonfinancial assets by aligning it further with the accounting for the derecognition of a business. Further, the proposed ASU would result in the remeasurement of any retained noncontrolling interest to fair value, which may lead to a higher risk of future impairment and may raise further questions regarding the technical merits of recording gains on retained interests.

    29 June 2016

    Comment letter - FASB proposal on technical corrections and improvements to its revenue standard
    In our comment letter, we support the FASB’s proposal to address feedback received from stakeholders and to make other improvements to its new revenue standard. Overall, we believe that the proposed amendments would address many of the concerns raised by constituents, provide additional clarity and improve consistency in application. We also recommend additional clarifications.

    9 June 2016

    Technical Line - Accounting for cloud computing arrangements as software licenses or service contracts
    New US GAAP guidance on how customers in cloud computing arrangements determine whether the arrangement includes a software license went into effect for all calendar-year entities at the beginning of this year. Our publication discusses the new guidance, along with whether customers in cloud computing arrangements that do not include software licenses should capitalize or expense implementation and other up-front costs that relate to such arrangements.

    9 June 2016

    To the Point - Clarifying the accounting for the derecognition of nonfinancial assets and in substance nonfinancial assets
    The FASB proposed clarifying the guidance on how to account for the derecognition of nonfinancial assets and in substance nonfinancial assets once an entity adopts the new revenue recognition guidance. The proposal also would define what constitutes an in substance nonfinancial asset. Comments are due by 5 August 2016.

    10 May 2016

    To the Point - FASB issues narrow-scope amendments and practical expedients for its revenue standard
    The FASB issued final amendments to its new revenue recognition guidance on transition, collectibility, noncash consideration and the presentation of sales and other similar taxes. The amendments address implementation issues discussed by the Joint Transition Resource Group for Revenue Recognition created by the FASB and the IASB and are intended to reduce the cost and complexity of applying the new revenue standard.

    20 April 2016

    To the Point - FASB Transition Resource Group for Revenue Recognition discusses five more implementation issues
    Members of the FASB Transition Resource Group for Revenue Recognition (FASB TRG) discussed five more implementation issues stakeholders have raised about the new revenue standards and reached general agreement on several of them. The FASB will need to consider whether any further action is needed to address the issues on which the members of the FASB TRG did not reach general agreement. They involved considering “class of customer” when evaluating whether a material right exists and scoping of asset management fees from incentive-based capital allocation arrangements, such as carried interest arrangements. Our publication includes a list of questions and answers on which FASB TRG members reached general agreement.

    15 April 2016

    To the Point - FASB amends the licenses and performance obligations guidance in its new revenue standard
    The FASB issued final amendments to clarify the guidance on accounting for licenses of intellectual property (IP) and identifying performance obligations in its new revenue recognition standard. The amendments clarify how an entity should evaluate the nature of its promise in granting a license of IP and when a promised good or service is distinct within the context of a contract. The amendments also allow entities to disregard goods or services that are immaterial in the context of a contract.

    18 March 2016

    To the Point - FASB issues amendments to the principal versus agent guidance in its new revenue standard
    The FASB issued final amendments to the principal versus agent guidance in its new revenue standard that clarify how an entity should identify the unit of accounting for the principal versus agent evaluation and apply the control principle to certain types of arrangements, such as service transactions. The amendments also reframe the indicators to focus on evidence that an entity is acting as a principal rather than as an agent, revise existing examples and add new ones.

    16 November 2015

    Comment Letter - FASB proposal on narrow scope improvements and practical expedients for its revenue standard
    In our comment letter, we supported the FASB’s proposal to clarify the guidance in its new revenue standard on collectibility, presentation of sales and similar taxes, noncash consideration and transition. Overall, we believe that the proposed clarifications would improve consistency and, in many cases, provide a practical approach to applying the new standard. We also recommended additional clarifications.

    10 November 2015

    To the Point - Joint Transition Resource Group for Revenue Recognition addresses more implementation issues
    Members of the Joint Transition Resource Group for Revenue Recognition (TRG) addressed four more implementation issues stakeholders have raised about the new revenue standards and reached general agreement on many questions. TRG members expressed diverse views on certain questions related to restrictions and renewals of licenses of intellectual property. Our publication includes a list of questions and answers on which TRG members reached general agreement.

    15 October 2015

    Comment Letter - FASB proposal to clarify the principal versus agent guidance in the new revenue standard
    In our comment letter, we supported the FASB’s proposal to clarify the principal versus agent guidance in its new revenue standard and further supported the decision by the FASB and the IASB to propose converged amendments to this guidance. Overall, we believe that the proposed amendments would enhance the operability of the standard and result in more consistent application across entities, although significant judgment would still be required. We also recommended additional clarifications.

    8 October 2015

    To the Point - Amending new revenue guidance on licenses, performance obligations would affect life sciences entities
    This publication focuses on how life sciences entities would be affected by the FASB’s amendments to its new revenue recognition guidance on licenses of intellectual property and identifying performance obligations.

    8 October 2015

    To the Point - Amending new revenue guidance on licenses, performance obligations would affect M&E entities
    This publication focuses on how media and entertainment entities would be affected by the FASB’s amendments to its new revenue recognition guidance on licenses of intellectual property and identifying performance obligations.

    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.