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.


ASU 2016-08

  • 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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