The FASB has agreed to a one-year delay of the effective date for the new revenue recognition standard. Based on feedback from stakeholders and in light of forthcoming amendments to the new revenue recognition standard, the FASB agreed to push back the implementation dates to allow adequate time for effective implementation. While the IASB is considering a similar one-year deferral of the new revenue recognition standard, it has not released a final decision.
Key Provisions
Public Entities: The new revenue recognition standard is now effective for fiscal years and interim periods within those fiscal years that begin after December 15, 2017. For those who use a calendar year-end, the new revenue recognition standard applies in their 2018 interim financial statements.
Note: “Public entities” includes public business entities, not-for-profit entities that have issued, or are a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market, and employee benefit plans that file or furnish financial statements with or to the SEC.
Non-public Entities: The new revenue recognition standard is now effective for fiscal years that begin after December 15, 2018 and interim periods within fiscal years that begin after December 15, 2019. For those who use a calendar year-end, the new revenue recognition standard applies to their 2019 annual financial statements and to their 2020 interim financial statements.
Early Adoption: Early adoption of the new revenue recognition standard is permitted except for entities reporting under U.S. GAAP who must wait to adopt the standard. These entities may not apply the new revenue recognition standard earlier than the original effective date for public entities or no sooner than 2017 for entities using a calendar year-end. All entities are permitted to adopt the new revenue recognition standard as early as annual periods beginning after December 15, 2016.
The delay is welcome relief for many as the implementation of the new revenue recognition standard requires substantial change for their organizations’ systems and procedures.
For questions or assistance in evaluating the appropriate implementation strategy, contact Greg Elpers, CPA, CCA at gelpers@hsccpa.com or 800.880.7800.