2. Amend paragraph 924-605-25-2, with a link to transition paragraph 924-605-65-1, as follows:
Entertainment—Casinos—Revenue Recognition
Recognition
924-605-25-2 Base jackpots shall be charged to revenue ratably over the period of play expected to precede payout; however, if immaterial, they
An entity shall accrue a liability and charge a jackpot (or a portion thereof as applicable) shall be charged
to revenue
at the time the entity has the obligation to pay the jackpot (or a portion thereof as applicable), regardless of the manner of payment. See paragraphs 924-605-55-1 through 55-2 for implementation guidance. when established. Any portion of the base jackpot not charged to revenue when the jackpot is paid shall be charged to revenue at that time.
3. Add paragraphs 924-605-55-1 through 55-2, with a link to transition paragraph 924-605-65-1, as follows:
Implementation Guidance and Illustrations
>Implementation Guidance
924-605-55-1 The implementation guidance in this paragraph and the following paragraph addresses the application of paragraph 924-605-25-2. Some slot machines or other games may contain base jackpots. Depending on the applicable gaming regulations, an entity may be able to avoid the payment of a base jackpot, for example, by removing the machine from play. In accordance with the guidance in paragraph 924-605-25-2, no liability associated with the base jackpot is recognized in such cases until the entity has the obligation to pay the base jackpot. That is the case even if the entity has no intention of removing the machine from play and expects the base jackpot to ultimately be won.
924-605-55-2 This implementation guidance addresses the application of paragraph 924-605-25-2. Some slot machines or other gaming machines include progressive jackpots. Entities in many gaming jurisdictions cannot avoid payment of the portion of the progressive jackpot that is incremental to the base jackpot because the gaming regulators consider the incremental portion of the jackpot to be funded by customers and required to be paid out (whether as a jackpot or through other means, such as a raffle). Paragraph 924-605-25-2 requires that, in such cases, the incremental portion of the jackpot be accrued as a liability at the time of funding (play) by its customers.
4. Add paragraph 924-605-65-1 and its related heading as follows:
> Transition Related to Accounting Standards Update No. 2010-16, Entertainment—Casinos (Topic 924): Accruals for Casino Jackpot Liabilities
924-605-65-1 The following represents the transition and effective date information related to Accounting Standards Update No. 2010-16, Entertainment—Casinos (Topic 924): Accruals for Casino Jackpot Liabilities:
a. The pending content that links to this paragraph shall be effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2010.
b. An entity shall apply the pending content that links to this paragraph by recording a cumulative-effect adjustment to opening retained earnings as of the beginning of the period of adoption. The entity shall calculate the cumulative-effect adjustment as the difference between the following amounts:
1. The amounts recognized in the statement of financial position before initial application of the pending content that links to this paragraph
2. The amounts recognized in the statement of position immediately after initial application of the pending content that links to this paragraph.
c. Earlier application is permitted. If an entity elects early application and the period of adoption is not the first reporting period of the entity's fiscal year, the entity shall apply the pending content that links to this paragraph retrospectively from the beginning of its fiscal year.
d. An entity shall provide the disclosures in paragraphs 250-10-50-1 through 50-3 in the period that it adopts the pending content that links to this paragraph.
5. Add paragraph 924-605-00-1 as follows:
924-605-00-1 The following table identifies the changes made to this Subtopic.
Paragraph Number |
Action |
Accounting Standards Update |
Date |
924-605-25-2 |
Amended |
2010-16 |
04/26/2010 |
924-605-55-1 |
Added |
2010-16 |
04/26/2010 |
924-605-55-2 |
Added |
2010-16 |
04/26/2010 |
924-605-65-1 |
Added |
2010-16 |
04/26/2010 |
The amendments in this Update were adopted by the unanimous vote of the five members of the Financial Accounting Standards Board:
Robert H. Herz, Chairman
Thomas J. Linsmeier
Leslie F. Seidman
Marc A. Siegel
Lawrence W. Smith