The Accounting Policy & Practice Report ® provides financial accounting policy makers, advisors, and practitioners with the latest news, expert insights, and guidance on emerging, evolving,...
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.
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.
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 topics on the agenda for the Nov. 9 meeting included:
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 firstname.lastname@example.org
To contact the editor responsible for this story: Laura Tieger Salisbury at email@example.com
Agenda papers detailing issues discussed at the Nov. 9 Transition Resource Group meeting are available at http://www.ifrs.org/Meetings/Pages/Joint-TRG-for-Revenue-Recognition-November-2015.aspx.
Minutes of TRG meetings and other related information are posted at http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176164066683#07-13-15.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)