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Heads Up — Observations from a review of public filings by early adopters of the new revenue standard

Published on: Jan 22, 2018

Download PDFJanuary 22, 2018
Volume 25, Issue 1

by Emily Childs, Eric Knachel, and Rob Moynihan, Deloitte & Touche LLP


As a result of the recognition and measurement requirements in the FASB’s new revenue standard (ASC 6061), some companies will need to make wholesale changes to their financial statements. For other companies, the effect of the new requirements will be less significant. However, all entities will need to carefully consider the standard’s new and modified quantitative and qualitative disclosure guidance, which will significantly increase the amount of information they should disclose about revenue activities and related transactions. Accordingly, since the standard’s mandatory adoption date2 has either arrived or is rapidly approaching, companies are sharpening their focus on those disclosure requirements.3

This Heads Up provides insight into our review of the disclosures in the public filings of a group of companies that early adopted the standard in 2017. Entities adopting the standard beginning in 2018 may benefit from evaluating the disclosure trends we have observed as a result of this review. For a comprehensive discussion of the new revenue standard, see Deloitte’s A Roadmap to Applying the New Revenue Recognition Standard.

Key Takeaways

Key Takeaways

  • The new revenue standard’s requirement to provide more comprehensive disclosures is likely to significantly affect an entity’s financial statements regardless of its effect on recognition patterns.
  • We observed diversity in the type and amount of information entities have disclosed.
  • Many early adopters have chosen to add a separate and specific revenue footnote that contains the required disclosures.
  • When providing disaggregated revenue disclosures, the majority of early adopters used three or fewer categories. The most commonly selected categories were (1) timing of transfer of goods and services (point in time vs. over time) and (2) product lines.
  • Most early adopters elected multiple practical expedients related to their ASC 606 disclosures, most commonly those related to remaining performance obligations.
  • To the extent that the accounting standard setters clarify guidance and regulators issue more comments, we expect entities to continue to refine the information they disclose.


1 FASB Accounting Standards Codification Topic 606, Revenue From Contracts With Customers.

2 Public business entities reporting under U.S. GAAP are required to adopt the new revenue standard for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2017. Early adoption is permitted as of reporting periods (including interim periods) beginning after December 15, 2016. For nonpublic entities, the new revenue standard is effective for annual periods beginning after December 15, 2018, and early adoption is also permitted.

3 For additional discussion of companies’ disclosures about implementing the new standard, see Deloitte’s November 21, 2017, Heads Up.


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