FASB delays revenue recognition effective date

Citing challenges for financial statement preparers, FASB voted to delay the effective date of the new revenue recognition standard by one year, with early adoption permitted as of the original effective date.

As a result of the delay, public business entities, certain not-for-profit entities, and certain employee benefit plans would apply the new revenue recognition standard in annual reporting periods beginning after Dec. 15, 2017, including interim reporting periods within that reporting period. Earlier application would be permitted only as of annual reporting periods beginning after Dec. 15, 2016, including interim reporting periods within that reporting period.

All other entities would have an additional year for implementation, applying the guidance to annual reporting periods beginning after Dec. 15, 2018, and interim reporting periods within annual reporting periods beginning after Dec. 15, 2019.

Application for all other entities would be permitted earlier only as of an annual reporting period beginning after Dec. 15, 2016, including interim reporting periods within that reporting period; or 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 an entity first applies the new guidance.

The International Accounting Standards Board (IASB) also approved a one-year delay in its new revenue recognition standard, which is converged with FASB’s.