2. Amend pending content transition date for all paragraphs that link to paragraph 606-10-65-1 as follows:
Transition Date: (P) December 16, 2017 2016
; (N) December 16, 2018 2017
Transition Guidance: 606-10-65-1
Note: These transition date changes comprise Maintenance Update 2015-15; see release notes for details.
3. Amend paragraph 606-10-65-1 as follows:
Revenue from Contracts with Customers—Overall
Transition and Open Effective Date Information
> Transition Related to Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606)
606-10-65-1 The following represents the transition and effective date information related to Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606):
a. A
public business entity, a
not-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market, and an employee benefit plan that files or furnishes financial statements with or to the Securities and Exchange Commission shall apply the pending content that links to this paragraph for annual reporting periods beginning after December 15,
20172016
, including interim reporting periods within that reporting period. Earlier application is
not
permitted
only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period.
b. All other entities shall apply the pending content that links to this paragraph for annual reporting periods beginning after December 15,
20182017
, and interim reporting periods within annual reporting periods beginning after December 15,
20192018
. However, all other entities may elect to apply the pending content that links to this paragraph earlier only as of
either:
1. An annual reporting period beginning after December 15, 2016, including interim reporting periods within that reporting period
(public entity effective date)
.
2. An annual reporting period beginning after December 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 pending content that links to this paragraphDecember 15, 2017
.
3.
Subparagraph superseded by Accounting Standards Update 2015-14. An annual reporting period beginning after December 15, 2017, including interim reporting periods within that reporting period.
c. For the purposes of the transition guidance in (d) through (i):
1. The date of initial application is the start of the reporting period in which an entity first applies the pending content that links to this paragraph.
2. A completed contract is a contract for which the entity has transferred all of the goods or services identified in accordance with revenue guidance that is in effect before the date of initial application.
d. An entity shall apply the pending content that links to this paragraph using one of the following two methods:
1. Retrospectively to each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10 subject to the expedients in (f).
2. Retrospectively with the cumulative effect of initially applying the pending content that links to this paragraph recognized at the date of initial application in accordance with (h) through (i).
e. If an entity elects to apply the pending content that links to this paragraph retrospectively in accordance with (d)(1), the entity shall provide the disclosures required in paragraphs 250-10-50-1 through 50-3 in the period of adoption.
f. An entity may use one or more of the following practical expedients when applying the pending content that links to this paragraph retrospectively in accordance with (d)(1):
1. For completed contracts, an entity need not restate contracts that begin and end within the same annual reporting period.
2. For completed contracts that have variable consideration, an entity may use the transaction price at the date the contract was completed rather than estimating variable consideration amounts in the comparative reporting periods.
3. For all reporting periods presented before the date of initial application, an entity need not disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when the entity expects to recognize that amount as revenue (see paragraph 606-10-50-13).
g. For any of the practical expedients in (f) that an entity uses, the entity shall apply that expedient consistently to all contracts within all reporting periods presented. In addition, the entity shall disclose all of the following information:
1. The expedients that have been used
2. To the extent reasonably possible, a qualitative assessment of the estimated effect of applying each of those expedients.
h. If an entity elects to apply the pending content that links to this paragraph retrospectively in accordance with (d)(2), the entity shall recognize the cumulative effect of initially applying the pending content that links to this paragraph as an adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) of the annual reporting period that includes the date of initial application. Under this transition method, an entity shall apply this guidance retrospectively only to contracts that are not completed contracts at the date of initial application (for example, January 1,
20182017
, for an entity with a December 31 year-end).
i. For reporting periods that include the date of initial application, an entity shall provide both of the following additional disclosures if the pending content that links to this paragraph is applied retrospectively in accordance with (d)(2):
1. The amount by which each financial statement line item is affected in the current reporting period by the application of the pending content that links to this paragraph as compared with the guidance that was in effect before the change
2. An explanation of the reasons for significant changes identified in (i)(1).
4. Amend paragraph 606-10-00-1, by adding the following item to the table, as follows:
606-10-00-1 The following table identifies the changes made to this Subtopic.
Paragraph |
Action |
Accounting Standards Update |
Date |
606-10-65-1 |
Amended |
2015-14 |
08/12/2015 |
The amendments in this Update were adopted by the affirmative vote of six members of the Financial Accounting Standards Board. Mr. Siegel dissented.
Mr. Siegel dissents from the issuance of this Accounting Standards Update because he believes that allowing an entity to adopt the guidance in Topic 606 as of the original effective date will negatively affect users of financial statements. Mr. Siegel would have preferred that this Update defer the effective date of the guidance in Topic 606 for all entities by one year but prohibit earlier application of that guidance.
Mr. Siegel notes that the objective of financial reporting is to provide information that is useful to users of financial statements and that comparability is one of the four qualitative characteristics that enhance the usefulness of financial information. Mr. Siegel believes that allowing entities to adopt the guidance in Topic 606 as of the original effective date will reduce the comparability of financial reporting between entities that adopt the guidance in Topic 606 as of the original effective date and those that adopt the guidance as of the deferred effective date. Mr. Siegel notes that similar concerns were raised by several preparers and an institution representing users of financial statements in their comment letters submitted on the proposed Update on this deferral.
Mr. Siegel acknowledges that permitting entities to apply the guidance in Topic 606 as of the original effective date will result in noncomparability for a fairly short period as a result of the amendments in this Update. However, Mr. Siegel is concerned that the period of noncomparability could be longer if the Board later determines that an additional deferral of the effective date is necessary.
Members of the Financial Accounting Standards Board:
Russell G. Golden, Chairman
James L. Kroeker, Vice Chairman
Daryl E. Buck
Thomas J. Linsmeier
R. Harold Schroeder
Marc A. Siegel
Lawrence W. Smith