Issues In-Depth   |   June 2016
 

Revenue: transition options – what is the best option for your business?

KPMG’s insights on ASC 606 transition choices. The transition options can have a significant effect on revenue trends and cost information. KPMG discusses factors in making your decision.

Applicability

ASC Topic 606

  • 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:

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

  • Companies choose between the retrospective method and the cumulative effect method
  • An optional practical expedient creates additional alternatives that can simplify the restatement process or reduce the number of contracts that need to be restated, but reduces comparability

Report contents

  • Transition at a glance
  • Transition requirements
  • How the options affect the accounting
  • Summary of the effects of each transition option
  • Additional factors to consider
  • Next steps

 

 

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