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The Update:
Publication date: 30 Jan 2020
us FASB Staff Q&A Revenue
- Removes inconsistencies and weaknesses in existing revenue requirements
- Provides a more robust framework for addressing revenue issues
- Improves comparability of revenue recognition practices across entities, industries,
jurisdictions, and capital markets
- Provides users of financial statements with more useful information through improved disclosure requirements
- Simplifies the preparation of financial statements by reducing the number of requirements to which organizations must refer.
The FASB announced the formation of the Transition Resource Group for Revenue Recognition
(TRG) in June 2014. The purpose of the TRG was to:
- Solicit, analyze, and discuss stakeholder issues arising from implementation of the new
guidance
- Inform the FASB and the IASB about those implementation issues, which will help the Boards determine what, if any, action will be needed to address those issues
- Provide a forum for stakeholders to learn about the new guidance from others involved
with implementation.
During the meetings, the TRG members shared their views on the issues. The TRG did not issue any authoritative guidance. The FASB Accounting Standards Codification® is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities.
The FASB issued the following Accounting Standards Updates to clarify the application of Topic 606 for several issues discussed by the TRG:
- On December 21, 2016, the Board issued Accounting Standards Update No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.
- On May 9, 2016, the Board issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.
- On April 14, 2016, the Board issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.
- On March 17, 2016, the Board issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).
TRG meetings were held jointly with the IASB in 2014 and 2015. TRG meetings in 2016 were held by the FASB.
Copyright #year# by Financial Accounting Foundation, Norwalk, Connecticut.
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