Defining Issues   |   May 2016
 

FASB finalizes narrow-scope improvements for revenue standard

KPMG reports on ASU 2016-12, which simplifies and clarifies ASC 606. The FASB’s amendments simplify transition to the new standard and provide certain practical expedients under US GAAP.

Applicability

ASU 2016-12

  • US GAAP company that is currently assessing the impact of the new requirements of ASC Topic 606
  • US GAAP 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:

Annual periods:

For public business entities and certain not-for-profit entities the effective date for annual periods is the fiscal years beginning after Dec. 15, 2017.

For all other entites the effective date for annual periods is the fiscal years beginning after Dec. 15, 2018.

Interim periods:

For public business entities and certain not-for-profit entities the effective date for interim periods is the fiscal years beginning after Dec. 15, 2017.

For all other entites the effective date for interim periods is the fiscal years beginning after Dec. 15, 2019.

Early adoption:

For public business entities and certain not-for-profit entities the effective date for early adoption is the fiscal years beginning after Dec. 15, 2016.

For all other entites the effective date for early adoption is the fiscal years beginning after Dec. 15, 2016.

Key impacts

  • The amendments and practical expedients aim to simplify the transition to the new standard, to provide practical expedients for transition and sales taxes, and to clarify certain aspects of the standard for companies
  • The amendments primarily relate to US GAAP only, and therefore could result in differences between US GAAP and IFRS

Report contents

  • Collectibility
  • Completed contracts at transition
  • Transition practical expedients
  • Sales tax presentation: gross versus net
  • Noncash consideration
  • Next steps

 

 

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