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FASB issues ASU on prepaid stored-value products

  • FASB document Image

Mar 09, 2016

The FASB has issued Accounting Standards Update (ASU) No. 2016-04, “Recognition of Breakage for Certain Prepaid Stored-Value Products.”

Specif­i­cally, the ASU contains a narrow scope exception to the liability derecognition guidance on accounting for the unused portion of a card’s prepaid value (commonly referred to as “breakage”) and aligns ASC 405-20 with the breakage guidance in ASC 606.

For public business entities, as well as certain nonprofit entities and employee benefit plans, the effective date is annual reporting periods, and interim periods therein, beginning after December 15, 2017. The effective date for all other entities is one year later than this (i.e., December 15, 2018). Early adoption is permitted.

For more in­for­ma­tion, see Deloitte's related Heads Up as well as the ASU on the FASB’s Web site.

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