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Deloitte comments on FASB's invitation to comment on the recognition and measurement of deferred revenue in business combinations

Published on: Apr 30, 2019

Deloitte & Touche LLP has commented on the FASB's February 2019 invitation to comment (ITC), Measurement and Other Topics Related to Revenue Contracts With Customers Under Topic 805.

An excerpt from the comment letter is shown below:

We have considered the alternatives presented in the ITC and, conceptually, we agree that the amount of revenue the acquirer recognizes related to an acquired revenue contract generally should not be affected by the timing of the payments in a contract. However, we recommend that the Board describe the objective differently. The objective should be to measure the fair value of the contractual rights and obligations in an acquired revenue contract combined as a single unit of account, either as an asset or a liability. We believe that this alternative would be simpler and more consistent with the principles in ASC 606.

Full text of the comment letter is available below.

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