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FASB issues guidance on service concession arrangements

  • FASB document Image

May 16, 2017

The FASB has issued Accounting Standards Update (ASU) No. 2017-10, “Determining the Customer of the Operation Services — a consensus of the FASB Emerging Issues Task Force.”

The ASU clarifies the “diversity in practice in how an operating entity determines the customer of the operation services for transactions within the scope of [ASC] 853, Service Concession Arrangements” by “clarifying that the grantor is the customer of the operation services in all cases for those arrangements.” The amendments also allow for a “more consistent application of other aspects of the revenue guidance, which are affected by this customer determination.”

For most entities that have adopted ASC 606, the ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted.

For more information, see the ASU on the FASB’s Web site.

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