Revenue Accounting Group Mulls Licenses, Casino Bets

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By Steve Burkholder

Nov. 9 — A joint FASB-IASB group aimed at easing the shift to new accounting rules on revenue mulled a range of issues, including time-based traits of licenses and casino wagers, at its last scheduled meeting.

The Transition Resource Group for Revenue Recognition—a vehicle for road testing the 2014 standards issued in unison by the Financial Accounting Standards Board and the International Accounting Standards Board before the far-reaching revenue rules take effect in January 2018—has run through the list of implementation issues prepared for the attention of the rulemakers.

Previous TRG meetings have led to planned changes to the revenue rules aimed at clarifying their application. Those include FASB's plan to issue by Dec. 31 amendments to the U.S. version of the standard pertaining to licenses and identifying performance obligations.

In terms of changed accounting practices, the new rules are expected to have the most impact on telecom, technology, construction, and military and aerospace production sectors.

Adding Color to ‘Gray Areas.'

The issues discussed at the Nov. 9 TRG meeting aren't expected to lead to amendments to the standards titled Revenue from Contracts with Customers (Accounting Standards Update No. 2014-09 and IFRS 15).

Instead, through the group's meeting minutes process or other means, the boards and their staffs could give examples of practical application of the revenue rules to add color to the “gray areas” under different scenarios.

In several real-life accounting scenarios analyzed by auditors, financial executives and others on the TRG, and by FASB, IASB and their staffs, discussion yielded a common takeaway message: The analysis described in agenda papers could be used as frameworks to aid the use of necessary judgments required to apply the revenue standards appropriately.

TRG Members Urge Tweaks

Some TRG members urged relatively minor tweaks to the revenue guidance to help in implementing the new rules.

One suggestion was to add specific words stating that fixed odds wagering at casinos should continue to be accounted for as revenue. Under current, industry-specific guidance that will be obsolete.

Group members and at least one FASB member also suggested the elimination of specific guidance on certain deferred costs and prepaid expenses (ASC 340-10). The U.S. board didn't register collective leanings on the issue.

Other Issues on Meeting Menu

Other topics on the agenda for the Nov. 9 meeting included:

• licenses and specific issues about renewals and restrictions, such as those based on not only geography but also time span;
• pre-production activities; and
• customer options for additional goods and services.


The meeting was the last one for the TRG this year. The group is expected to hold at least one more meeting sometime in 2016.

To contact the reporter on this story: Steve Burkholder in Norwalk, Conn., at

To contact the editor responsible for this story: Laura Tieger Salisbury at

For More Information

Agenda papers detailing issues discussed at the Nov. 9 Transition Resource Group meeting are available at

Minutes of TRG meetings and other related information are posted at


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