2022 Revenue Recognition: Issues and Problems (Currently Unavailable)

Author: Pat Patterson

The FASB issued Accounting Standards Update (ASU) No. 2014-09 in May 2014, Revenue from Contracts with Customers, Topic 606. After the release of ASU 2014-09 the FASB issued several amendments for further guidance and clarification. • ASU No. 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date • ASU No. 2016-08, Revenue from Contracts with Customers – Principal versus Agent Considerations (Reporting Revenue Gross Versus Net) • ASU No. 2016-10, Revenue from Contracts with Customers) – Identifying Performance Obligations and Licensing • ASU No. 2016-12, Revenue from Contracts with Customers– Narrow-Scope Improvements and Practical Expedients • Update 2017-13—Revenue Recognition (Topic 605), Revenue from Contracts with Customers • (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments (SEC Update) • Update 2017-14—Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) (SEC Update) • Update 2020-05—Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities The standard affects all entities (public, private, and not-for-profit) that have contracts with customers. However, there are some exceptions. For instance, leases accounted for under FASB ASC 840, Leases; insurance contracts accounted for under FASB ASC 944, Financial Services—Insurance; most financial instruments, and guarantees (other than product or service warranties) are excluded. The new standards require significantly more disclosure than prior (GAAP). ASC Topic 606 for revenue recognition provides principles that allow entities to use professional judgments necessary to recognize revenue as indicated by a transaction in a transaction that comes from a contract with a customer. This course discusses the revenue recognition issues that could be affected or changed, due to the Corona Virus pandemic.

Publication Date: February 2022

Designed For
Professionals in public practice, business, or other related positions that need the information for revenue recognition compliance.

Topics Covered

• Revenue Recognition
• Step 1. Contract
• Step 2. Performance Obligations
• Step 3. Transaction Price
• Step 4. Allocate the Transaction Price
• Step 5. Recognize Revenue
• How Will the New Standard Change Current GAAP?
• Disclosures
• Changes to the Changes
• Private Company Council (PCC)
• Proposed Accounting Standards Update
• Selected Problems

Learning Objectives

• Identify updates on accounting standard ASU 2014-09 for Revenue Recognition
• Identify updates on related accounting standards in the US issued after ASU 2014-09
• Recognize selected other related issues and problems, including COVID-19
• Identify the year the FASB and IASB issued a joint accounting standard on revenue recognition to address concerns surrounding the inconsistencies and complexities in accounting for revenue transactions
• Identify the ASC topic that eliminates the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replaces it with a principles-based approach for revenue recognition
• Identify the new revenue recognition standard for IFRS filers
• Identify the ASU issued in 2016 that addresses the accounting requirements with respect to principal vs. agent considerations
• Identify the second step in the revenue recognition model

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Accounting (2 hours)

Program Prerequisites
A basic understanding of revenue recognition.

Advance Preparation
None