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Highlights from the FASB’s and IASB’s June 22 meeting

  • FASB (US Financial Accounting Standards Board) Image
  • IASB (International Accounting Standards Board) Image

Jun 24, 2015

At their June 22, 2015, joint meeting, the FASB and IASB discussed questions that have arisen regarding the implementation of the principal-versus-agent considerations in ASC 606 and IFRS 15, “Revenue From Contracts With Customers.”

The boards made tentative decisions about the following aspects of the principal-versus-agent considerations:

  • Principle for determining whether an entity’s promise is to provide or to arrange — The boards reaffirmed that “an entity’s promise is to provide a specified good or service to a customer . . . when it controls the specified good or service before that good or service is transferred to the customer.”
  • Unit of account for the principal-versus-agent evaluation — The boards tentatively decided to clarify that “a specified good or service is a distinct good or service (or distinct bundle of goods or services).” 
  • Application of the control principle — The boards tentatively decided to clarify how the control principle is applied with respect to services.
  • Control indicators — The boards decided to further explain the role of the control indicators in ASC 606 and IFRS 15.
  • Illustrative examples — The boards decided to amend, and include additional, principal-versus-agent examples in ASC 606 and IFRS 15.

In addition, the FASB directed the staff to further research the estimation of gross revenue as a principal; the Board plans to discuss this topic at a future meeting.

For more in­for­ma­tion, see Deloitte's related journal entry as well as the meeting minutes on the FASB’s Web site.

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