Defining Issues | March 2016
FASB finalizes amendments to principal-agent guidance in new revenue standard
KPMG reports on ASU 2016-08, which amends ASC 606 principal-agent guidance. The FASB clarifies the principal-agent analysis, which focuses on control of the goods or services prior to transfer to customers.
Applicability
- Company that is currently assessing the impact of the new requirements of ASC Topic 606
- Company that is at an advanced stage of its ASC Topic 606 implementation
- Company that is comparing US GAAP to IFRS
Effective dates:
Mandatory effective dates and early adoption provisions:
Effective date: |
Public business entities and certain not-for-profit entities |
All other entities |
Annual periods – Fiscal years beginning after |
Dec. 15, 2017 |
Dec. 15, 2018 |
Interim periods – In fiscal years beginning after |
Dec. 15, 2017 |
Dec. 15, 2019 |
Early adoption allowed in fiscal years beginning after |
Dec. 15, 2016 |
Dec. 15, 2016 |
Key impacts
- Companies will need to re-evaluate their principal-agent conclusions using the new guidance as they prepare to adopt the new revenue standard
- The IASB is expected to issue identical amendments to its revenue standard to maintain convergence between US GAAP and IFRS
Report contents
- Determination of nature and control of goods or services
- Determination of principal and agent
- Next steps
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