Defining Issues   |   March 2017
 

Identifying the customer in a service concession arrangement

ASU 2017-10 codifies the EITF’s consensus that the customer in a service concession arrangement is always the grantor. This consensus will reduce diversity in practice in identifying the customer in these arrangements.

Applicability

ASU 2017-10 and ASU 2014-09

  • Operating entities that have a service concession arrangement in the scope of ASC 853

Relevant dates

Mandatory effective dates and early adoption provisions:

Effective date:

Annual periods – Fiscal years beginning after

Interim periods – In fiscal years beginning after

Public business entities

Dec. 15, 2017


Dec. 15, 2017

All other entities

Dec. 15, 2018


Dec. 15, 2019

Early adoption allowed?

Permitted for all entities including within interim periods (date of initial application is beginning of that fiscal year)

Effective date and transition guidance for the ASU depend on whether the new revenue standard has been or will be adopted early.

Key impacts

  • The customer in a service concession arrangement is always the grantor (government or public sector entity)
  • The identity of the customer affects revenue recognition and other aspects of the accounting for these arrangements
  • Effective date and transition guidance for the ASU on this consensus depend on whether the new revenue standard has been or will be adopted early

Podcast

  • Listen to KPMG’s podcast here

Report contents

  • Applicability
  • Key facts and impacts
  • Background on service concessions arrangements
  • Effective dates and transition

 

 

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