FASB decides to defer revenue recognition

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

FASB decides to defer revenue recognition

fotolia-77736023-subscription-monthly-m-accountingstandards.jpg

Taxpayers which use US Generally Accepted Accounting Principles (GAAP) in their financial reporting will get an extra year to implement the new revenue recognition standard after the Financial Accounting Standards Board (FASB) decided at its meeting on April 1 to defer its effective date.

Those entities which follow US GAAP will now have to apply the standard (Accounting Standards Update 2014-09) to their annual and interim reporting for periods after December 15 2017, rather than a year earlier. Private companies will have another year after this to incorporate the standard into their annual reporting and another year after that, that is, December 15 2019, to use it for their interim reporting.

All companies, both public and private, will be allowed to adopt the standard earlier than December 15 2017 if they want to, but not before December 15 2016, the original effective date for public entities.

FASB’s board has directed staff to draft a proposed Accounting Standards Update, with a 30-day comment period, to reflect these decisions.

FASB and the International Accounting Standards Board, which oversees the development of International Financial Reporting Standards (IFRS), issued a converged standard on revenue recognition in May 2014.

At the time, a joint statement from the two organisations said:

“The core principle of the new standard is for companies to recognise revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements.”





more across site & bottom lb ros

More from across our site

India’s budget changes goods and services tax rules; UK private school VAT challenge fast-tracked
It is understood that the US has vowed to oppose any outcome from talks taking place at the UN
It’s the second year in a row that RSM’s tax business has posted fee income growth above 10%
Recent guidance from the Indian tax authorities should provide confidence for investors, says Sanjay Sanghvi of Khaitan & Co
Grant Wardell-Johnson also suggests there could be solutions to the friction between the US and the OECD when it comes to pillar two
The president had so far avoided announcing tariffs on the US’s neighbours despite previous threats
The firm brought in three managing directors from EY and Deloitte in Europe; in other news, KPMG’s bid to practise law in US was delayed
One expert argues the ERS would be unlikely to improve taxpayers’ experience unless it comes with additional funding to hire more agents and staff
From pillar two and amount B to Apple’s headline EU Commission dispute, Martin Bonner and Yiwen Ping of Kreston Global argue that 2024’s key TP developments will inform 2025
Holland & Knight, Nelson Mullins and McCarter & English made the joint-most tax partner hires in the US last year, according to annual ITR Talent Tracker data
Gift this article