OUR THOUGHTS ON:

UPDATE: FASB Votes to Defer Effective Date of the New Revenue Recognition Standard

Audit

By Nick Lombardo

Updated from an earlier posted Schneider Downs article regarding the deferral of ASU No. 2014-09.

The Financial Accounting Standards Board (FASB) had a board meeting on April 1, 2015, and it discussed the results of staff research and outreach regarding the effective date of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09).  The Board decided to defer the effective date of ASU 2014-09 by one year. The FASB will issue an exposure draft with a 30-day comment period.

As a result, public entities would apply ASU 2014-09 to annual reporting periods beginning after December 15, 2017. Nonpublic entities would apply ASU 2014-09 to annual reporting periods beginning after December 15, 2018.

Public entities would apply ASU 2014-09 to interim reporting periods within annual reporting periods beginning after December 15, 2017 (that is, a public entity would be required to apply the new revenue standard beginning in the first interim period within the year of adoption). Nonpublic entities would apply ASU 2014-09 to interim reporting periods within annual reporting periods beginning after December 15, 2019 (that is, a nonpublic entity would not be required to apply ASU 2014-09 in interim periods within the year of adoption).

The Board decided to permit both public and nonpublic entities to adopt the new revenue standard early, but not earlier than, for annual periods beginning after December 15, 2016. A public entity would apply the new revenue standard to all interim reporting periods within the year of adoption. A nonpublic entity would not be required to apply the new revenue standard in interim periods within the year of adoption.

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