AccountingLink

    Revenue recognition

    6 September 2018

    Technical Line - FASB issues guidance on accounting for implementation costs in cloud computing arrangements
    Our Technical Line highlights key accounting and financial reporting implications of the new standard that requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. Early adoption is permitted for all entities.

    11 June 2018

    Comment Letter - FASB proposal to clarify the guidance on collaborative arrangements
    In our comment letter, we support the FASB’s proposal to clarify the scoping guidance in ASC 808, Collaborative Arrangements, and ASC 606, Revenue from Contracts with Customers, and believe the amendments would remove doubt about whether a counterparty in a collaborative arrangement also could be a customer for one or more transactions. However, we do not believe the FASB should preclude the presentation of amounts recorded for collaborative arrangements as revenue when the amounts are not received from a customer or directly related to third-party sales.

    31 May 2018

    Financial Reporting Developments - Software: Revenue recognition
    We have updated our FRD publication on software revenue recognition to clarify and enhance our interpretative guidance.

    1 May 2018

    To the Point - FASB proposes clarifying guidance on collaborative arrangements
    The FASB proposed clarifying that certain transactions between participants in a collaborative arrangement should be accounted for as revenue under ASC 606 when the participant is a customer. When the counterparty is not a customer, the proposal would preclude a transaction from being presented as revenue if it does not directly relate to third-party sales. Comments are due by 11 June 2018.

    21 March 2018

    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.

    1 March 2018

    To the Point - FASB proposes guidance on accounting for implementation costs in cloud computing arrangements
    The FASB proposed requiring a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to defer and recognize as an asset. The proposal would align the guidance for recognizing implementation costs incurred in a hosting arrangement that is a service contract with that for implementation costs incurred in an arrangement that includes an internal-use software license. The FASB also proposed new disclosures for implementation costs for all internal-use software and hosting arrangements.

    4 December 2017

    Technical Line - How the new revenue standard affects life sciences entities
    We have updated our Technical Line, How the new revenue standard affects life sciences entities, to include additional factors that life sciences entities should consider when evaluating the effect of termination clauses on contract duration and to reflect the SEC release that updates the Commission’s guidance on accounting for sales of vaccines that are placed in the national stockpile. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    20 November 2017

    Technical Line - How the new revenue standard affects midstream oil and gas entities
    Our Technical Line highlights key implications of the new revenue standard for midstream 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.

    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.

    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.

    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.

    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.