OUR THOUGHTS ON:

FASB Approves One Year Deferral for the New Revenue Recognition Standard

Audit

By Brian Matthews

On July 9, 2015, the FASB approved a one-year deferral of new revenue recognition guidance that was originally issued in May 2014.  Accounting Standard Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 605) will be effective for public entities for interim and annual periods beginning after December 15, 2017.  For calendar year-ends, the new guidance is effective January 1, 2018.  For nonpublic entities, the ASU is effective for interim and annual periods beginning after December 15, 2018, or January 1, 2019 for calendar-year entities. 

Many prepares have been awaiting this deferral as they continue to find difficulties in implementing ASU No. 2014-09 while the FASB, in recent weeks, has issued clarifications to the original guidance (such as the most recent performance obligation clarification and licensing clarification). 

Although the effective dates seem to be well into the future, preparers will need to be cognizant of appropriate policies and have procedures in place, long before the effective date. 

Contact us with questions about the new revenue recognition standard and how it will affect your company and visit our Audit blog for more articles about rev rec.

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