AICPA Issues Revenue Recognition Working Drafts for Aerospace, Telecom and Time-Shares

The AICPA’s Financial Reporting Executive Committee (FinREC) has issued four new working drafts of accounting issues related to the implementation of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers – for broker-dealers and depository and lending institutions – and is soliciting feedback.

The ASU will eliminate the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition.

This standard has the potential to affect every entity’s day-to-day accounting and, possibly, the way business is executed through contracts with customers.

The AICPA established 16 industry task forces to help develop a new Accounting Guide on Revenue Recognition that will provide helpful hints and illustrative examples for applying the new Revenue Recognition Standard. Final revenue recognition implementation issues will be included in a Revenue Recognition Guide that the AICPA is developing.

The working drafts of accounting issues are available at:

Aerospace & Defense: http://www.aicpa.org/InterestAreas/FRC/AccountingFinancialReporting/RevenueRecognition/Pages/RRTF-Aerospace.aspx

o Issue #1-8: Contract modifications including unpriced change orders, claims and options

Telecommunications: http://www.aicpa.org/InterestAreas/FRC/AccountingFinancialReporting/RevenueRecognition/Pages/RRTF-Telecom.aspx

o Issue #15-2:Identification of Separate Performance Obligations

o Issue #15-9: Determining the standalone selling price and allocating the transaction price

Time-Share: http://www.aicpa.org/InterestAreas/FRC/AccountingFinancialReporting/RevenueRecognition/Pages/RRTF-Timeshare.aspx

Issue #16-1: Identifying Performance Obligations in Time-Share Interval Sales Contracts

Interested parties are encouraged to submit their informal feedback on the implementation issues by March 1, 2017.

Accounting