Additional Guidance with respect to Section 3400 – PEAC

Date recorded:

At its meeting on September 10, 2019, the Private Enterprise Advisory Committee (PEAC) considered stakeholder feedback on the Exposure Draft and provided advice on staff’s recommendations based on the feedback. Committee members recommended that the Board:

  1. clarify that the guidance related to determining the unit of account and whether to combine or segment contracts is applicable to all types of revenue transactions;
  2. provide decision trees for the identification of units of account and allocation of revenue;
  3. include the residual approach for estimating the stand-alone selling price of an item in multiple-element arrangements when such a stand-alone selling price is not directly observable; and
  4. include an illustrative example for the accounting of upfront non-refundable fees or payments in respect of license agreements.

The Committee also discussed feedback and staff recommendations related to:

  1. costs to include when measuring the degree of completion based on the ratio of cost incurred to total estimated costs;
  2. criteria to consider when accounting for bill and hold arrangements;
  3. the disclosure requirements for different arrangements; and
  4. transition provisions.

The Board will consider the Committee’s feedback at its September 2019 meeting.

Review the meeting notes on the AcSB's Web site.

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