The FASB and IASB issued Revenue from contracts with customers, their converged standard on revenue recognition in May 2014. The standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries and significantly reduce the complexity inherent in today's revenue recognition guidance.
The FASB's revenue standard is effective for public entities for the first interim period within annual reporting periods beginning after December 15, 2016 (nonpublic companies have an additional year). The FASB’s standard will prohibit early adoption for public entities. The FASB’s standard will allow early adoption for nonpublic entities, but no earlier than the effective date for public entities. The IASB’s standard is effective for the first interim period within annual reporting periods beginning on or after January 1, 2017, with early adoption permitted.
FASB Vice Chairman James Kroeker recently discussed the effective date of the new revenue standard as the boards have received a number of requests to delay the implementation date. The FASB will take their cues from the results of outreach that will be performed over the next several months and will announce a decision no later than the second quarter of 2015.
Our global accounting and financial reporting guide describes the accounting for revenue from contracts with customers under the converged U.S GAAP and IFRS revenue standard (ASC 606) issued in May 2014. It has been prepared to support entities as they identify the implications of the new revenue recognition standard, evaluate its impact (on business strategies, processes, systems, controls, financial statement recognition and required disclosures) and prepare for implementation. Read more