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May 18 — The Financial Accounting Standards Board proposed technical changes to its revenue reporting rules.
The rules allow companies with unfinished obligations—to provide goods or services—an easier financial disclosure process.
As part of the planned implementation guidance, FASB's May 18 proposal also would clarify that fixed-odds wagering contracts are to be covered in the far-reaching revenue recognition standard—ASU 2014-09; Accounting Standards Codification 606—rather than in existing derivatives and hedging rules—Accounting Standards Codification 815.
The board aims, via the draft guidance and an earlier final ASU, to help smooth the shift in January 2018 to the revenue rules, issued in 2014.
FASB wants comments on the May 18 proposal submitted by July 2.
The May 18 propsoal comes on the heels of FASB's publication May 9 of supplementary revenue guidance. That ASU, among other things, eases the adoption of the new rules in the factoring of sales and similar taxes into the price of a revenue-generating transaction (see related story) .
On what FASB calls “remaining performance obligations,” the board proposes “practical expedients”—implementation shortcuts—for such obligations in circumstances “in which an entity need not estimate variable consideration in order to recognize revenue,” the board states in the May 18 draft ASU. FASB also calls for an expansion of information to be disclosed when an entity uses one of the practical expedients.
Other items in the draft implementation guidance on revenue reporting include:
FASB and the International Accounting Standards Board released their jointly-written, like-minded revenue standards in May 2014 (10 APPR 525, 6/6/14). The boards' Transition Resource Group for Revenue Recognition helped the two boards frame the supplemental implementation guidance.
FASB has chosen to issue more implementation guidance, including minor amendments to its revenue standard, than IASB has.
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The draft technical corrections and improvements issued May 18 are available athttp://src.bna.com/e69.
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