Issues & Trends   |   September 2016

Revenue: Telecoms

KPMG provides ASC 606 telecoms guidance. KPMG provides a comprehensive and illustrated understanding of applying the new revenue standard for the telecommunications industry based on our experience helping clients around the world.


  • Telecommunications industry
  • 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

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

  • Revenue recognition for handsets may be accelerated
  • Customer options (material rights) require careful analysis
  • Accounting for costs to obtain or fulfil a contract may change
  • Revisions may be needed to tax planning, covenant compliance and sales incentive plans
  • Sales and contracting processes may need to be reconsidered
  • IT systems will need to be changed
  • New estimates and judgments will be required
  • Accounting processes and internal controls will need to be revised
  • Extensive new disclosures are required
  • Companies will need to communicate with stakeholders

Report contents

  • Identify the contract with a customer
  • Identify the performance obligations in the contract
  • Determine the transaction price
  • Allocate the transaction price to the performance obligations in the contract
  • Recognize revenue when or as the entity satisfies a performance obligation
  • Contract costs
  • Customer options for additional goods or services
  • Nonrefundable up-front fees
  • Indirect channel sales
  • Repurchase agreements



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