Defining Issues | September 2018
EITF reaches consensus-for-exposure on contract liabilities in business combinations
Filed under: Business combinations
KPMG reports on the EITF’s consensus-for-exposure to align the criteria for recognizing revenue contract liabilities in a business combination with the definition of a performance obligation in ASC 606. The EITF also directed the FASB staff to draft a discussion paper with an invitation to comment on certain measurement issues related to revenue contract liabilities in a business combination.
Applicability
- All companies that acquire revenue contracts in a business combination after the adoption of ASC 606
Relevant dates
- Exposure draft expected in Q4 2018
- Discussion paper on certain related issues with invitation to comment expected in Q4 2018
Key impacts
- The EITF’s consensus-for-exposure on business combinations would align the recognition criteria for revenue contract liabilities in a business combination with the definition of a performance obligation in ASC 606
- The obligation would be measured at fair value
- Certain issues related to the measurement of contract liabilities in a business combination will be outlined in a discussion paper with an invitation for stakeholders to comment
Report contents
- Applicability
- Key facts and impacts
- Revenue performance obligations in a business combination
Related content
At the same meeting, the EITF reached consensus for exposure to permit further cost capitalization for episodic TV series. Read our web article