Proposed REVISION TO REVENUE RECOGNITION STANDARDBy
On May 12, the Financial Accounting Standards Board (FASB) issued an exposure draft of a proposed Accounting Standards Update (ASU) that clarifies two parts of its new revenue recognition standard: performance obligations and licensing. Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing aims to minimize diversity in practice and reduce complexity and cost to companies when they first implement the new standard as well as on an ongoing basis.
The FASB issued the proposal after receiving feedback from its Transition Resource Group for Revenue Recognition and other stakeholders. As companies started to implement the new standard, they realized they are ill-equipped for such a drastic change. Financial statement preparers in some industries won’t have enough time to update their systems and processes by the current effective date. This feedback also led the FASB to consider extending the effective date for the standard.
See the full proposal at http://bit.ly/RevRecProposal.