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FinREC issues revenue recognition working drafts for airline, gaming industries

'Tier status' affinity programs are among the issues.

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New working drafts issued by the AICPA Financial Reporting Executive Committee (FinREC) address issues that financial statement preparers in the gaming and airline industries may encounter as they implement FASB’s new revenue recognition standard.

FASB issued Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, in May 2014, and the AICPA is developing a guide to assist preparers with their implementation efforts. These working drafts are the latest of many that FinREC has issued during its development of the guide.

The airline industry guidance proposed is Issue No. 2-6(C): Assessment of Whether “Tier Status” in an Affinity Program Conveys a Material Right to Goods and Services and Therefore Gives Rise to a Separate Performance Obligation.

Three gaming industry issues are proposed:

  • Issue No. 6-2: Net Gaming Revenue.
  • Issue No. 6-3: Promotional Allowances.
  • Issue No. 6-8(B): Assessment of Whether “Tier Status” in an Affinity Program Conveys a Material Right to Goods and Services and Therefore Gives Rise to a Separate Performance Obligation.

Issues No. 2-6(C) and No. 6-8(B) address the same issue for different industries. They use the same framework but have different industry-specific examples.

Comments on the working drafts were sought by Feb. 1. Comments on the gaming industry issues can be emailed to Kim Kushmerick at kkushmerick@aicpa.org. Airline industry issue comments can be sent to Yelena Mishkevich at ymishkevich@aicpa.org.