FASB issues formal notice of revenue recognition deferral

FASB issued Accounting Standards Update (ASU) No. 2015-14, Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date.

Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the new standard to annual reporting periods beginning after Dec. 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after Dec. 15, 2016, including interim reporting periods within that reporting period.

All other entities are required to apply the guidance to annual reporting periods beginning after Dec. 15, 2018, and interim reporting periods within annual reporting periods beginning after Dec. 15, 2019. All other entities may apply the guidance earlier as of an annual reporting period beginning after Dec. 15, 2016, including interim reporting periods within that reporting period. All other entities also may apply the guidance earlier as of an annual reporting period beginning after Dec. 15, 2016, and interim reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first applies the guidance.

The International Accounting Standards Board (IASB) also voted to approve a one-year delay in the converged standard, and proposed clarifications and transition relief related to the new revenue recognition standard. The IASB is seeking comment, which can be submitted on the board’s website, by Oct. 28. The IASB plans to complete its discussion on this topic by the end of 2015 and issue amendments to the standard afterward. FASB also is proposing changes to its version of the new revenue recognition standard, and plans to seek comment in a number of exposure drafts.