May 05, 2016
Thomson Reuters Report Provides Guidance on the New Standards on Revenue Recognition from Contracts with Customers
NEW YORK – Thomson Reuters has released a special report providing guidance on the latest revenue recognition standards for revenues arising from contracts with customers. The report, An Overview of the Revised Accounting Model for Revenue Recognition, provides preparers and users of financial statements with an overview of the new model and its effects on companies.
In recent years, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have identified weaknesses and areas for improvement in accounting for revenue under both U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). The FASB issued a new standard — Accounting Standards Update (ASU) 2014-09 (Topic 606) — in May 2014 to standardize revenue recognition accounting principles worldwide. The FASB subsequently issued clarifying standards providing further guidance on areas such as licenses or the principal versus agent analysis.
“As they work on implementing the new standard for revenue recognition, companies must develop an in-depth understanding of the model in order to navigate its complexities,” said Anne-Lise Vivier, accounting publications managing editor at Thomson Reuters. “This report provides helpful guidance so companies can assess the immediate impact of the new standards and determine the steps they must take to remain compliant.”
Topics addressed in the report include:
- The key principles and the five-step approach for recognizing and measuring revenue.
- Factors to consider when determining whether to capitalize or expense contract costs.
- The presentation of contract liabilities, assets, or receivables in the financial statements.
- How to provide disclosures about the revenue and cash flows arising from contracts with customers.
- The effective dates and transition methods for ASU No. 2014-09 and related standards.
The free report is available at tax.thomsonreuters.com/Checkpoint-Catalyst-US-GAAP/revenue-recognition-accounting-model.
Thomson Reuters offers additional resources to help users stay informed on developments around revenue recognition:
- Thomson Reuters Checkpoint Catalyst: US GAAP examines specific accounting issues from a practical and workflow perspective, focusing on areas such as revenue recognition and the classification and measurement of financial instruments.
- Thomson Reuters Checkpoint Learning webinar Revenue from Contracts with Customers: An Overview of the New Standard provides an overview of the latest guidance with a focus on provisions likely to result in substantive changes to companies.
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