Industry Supplement   |   January 2018

 

Revenue for the asset management industry

KPMG’s insights on ASC 606 implementation.  With the new revenue standard now in effect, KPMG reports on the most significant industry issues.

Applicability

Applying the new revenue recognition standard

  • Companies in the asset management industry

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

  • Identifying the customer and the contract under the new standard may require significant judgment and impact the timing of revenue recognition and the accounting for certain contract costs
  • Accounting for variable consideration requires a different contract analysis and may require the estimation of fees
  • Asset managers will need to review their arrangements with third-party subadvisors and service providers to determine whether revenues should be presented net of the fees paid to those advisors
  • The new revenue standard establishes new requirements for evaluating the unit of account and providing disclosures

Report contents

  • Specific issues for asset managers
  • Expanded disclosures
  • Effective dates and transition
  • Impact on the organization

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