FASB proposes clarifications to its new revenue standard
30 Sep, 2015
The US Financial Accounting Standards Board (FASB) has issued a proposed ASU, 'Narrow-Scope Improvements and Practical Expedients', that would amend certain aspects of the Board’s May 2014 revenue standard, ASU 2014-09, 'Revenue From Contracts With Customers'.
The amendments, which are being proposed in response to feedback received by the FASB–IASB joint revenue recognition transition resource group (TRG), include the following:
- Collectibility and contract termination.
- Presentation of sales tax collected from customers.
- Noncash consideration.
- Contract modifications at transition.
- Completed contracts at transition.
- Transition technical correction.
The proposed ASU’s effective date and transition provisions would be aligned with the requirements of ASU 2014-09, which, once finalised, will be deferred by one year.
Comments on the proposed ASU are due by 16 November 2015.
In July 2015, the IASB also issued an ED proposing clarifications to its new revenue standard, IFRS 15 Revenue from Contracts with Customers. The FASB’s proposed ASU states:
The amendments in this proposed Update are not identical to those proposed by the IASB, and some are incremental to the amendments proposed by the IASB. The FASB expects that the amendments in this proposed Update would not result in financial reporting outcomes that are significantly different from those reported under IFRS for similar transactions.
For more information, see the press release and proposed ASU on the FASB’s website.
