Defining Issues | December 2016
 

FASB finalizes technical corrections to revenue standard

KPMG reports on FASB’s ASC 606 technical corrections. FASB’s last anticipated standard-setting activity prior to revenue standard effective date.

Applicability

ASU 2016-20

  • Company assessing the impact of the new requirements of ASC Topic 606
  • Company at an advanced stage of its ASC Topic 606 implementation

Relevant 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

  • Entity that is not required to estimate variable consideration to recognize revenue will generally not be required to estimate the amount of that consideration when disclosing the transaction price allocated to remaining performance obligations
  • Optional exemptions from the disclosure requirement for remaining performance obligations will provide some quantitative disclosure relief to certain entities
  • Additional qualitative disclosures required for applying new optional exemptions
  • Technical corrections and improvements made to address unintended consequences from applying the new revenue guidance
  • Technical corrections address questions raised by stakeholders on scope and application as well as impairment testing of contract costs, losses on long-term construction and production-type contracts, certain advertising costs and other issues

Report contents

  • Disclosure relief for remaining performance obligations
  • Summary of technical corrections

 

 

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