Financial Accounting Standard Board (FASB) provides Technical Accounting corrections and improvements to Revenue recognition with regards to topic 606, which provides guidance on Revenue from Contracts with Customers. This standard affects all entities, including public, private, and non-profit, having contracts customers, with the exceptions of certain items, including “Leases” accounted for under “FASB ASC 840”, insurance contracts accounted for under FASB ASC 944, “Insurance” (for financial services), guarantees (other than product or service warranties) and most financial instruments.
The amendments were set to be in effect for annual reporting periods of public entities beginning after December 15, 2016, including interim periods within that reporting period.
However, for all other entities, the guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018.
Areas for Correction or Improvement under the new guidance:
- Loan Guarantee Fees
- Contract Costs—Impairment Testing
- Contract Costs—Interaction of Impairment Testing with Guidance in Other Topics
- Provisions for Losses on Construction-Type and Production Type Contracts
- Scope of Topic 606
- Disclosure of Remaining Performance Obligations
- Disclosure of Prior-Period Performance Obligations
- Contract Modifications Example
- Contract Asset versus Receivable
- Refund Liability
- Advertising Costs
- Fixed-Odds Wagering Contracts in the Casino Industry
- Cost Capitalization for Advisors to Private Funds and Public Funds