FinREC issues revenue recognition working drafts for airline, gaming industries

By Ken Tysiac

New working drafts issued Thursday 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. Thursday’s working drafts are the latest of many that FinREC has issued during its development of the guide.

The airline industry guidance proposed Thursday 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 were proposed Thursday:

  • 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 are 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.

Ken Tysiac (ktysiac@aicpa.org) is a JofA editorial director.

Where to find October’s flipbook issue

The Journal of Accountancy is now completely digital. 

 

 

 

SPONSORED REPORT

2022 Payroll Update

Employees working remotely have created numerous issues for employers. The 2022 Payroll Update report provides insight on remote workforce tax issues, pandemic payroll issues and employer credits, and worker classification issues in the gig economy.