In May 2014, the IASB and FASB issued their converged standard on revenue recognition. The standard presents a number of challenges to preparers, evidenced by the deferral of the effective date and the level of activity at the Transition Resource Group.
Insurance contracts are outside the scope of the new standard, but insurance entities that render other services will be affected. Insurance entities will need to consider changes that might be necessary to information technology systems, processes, and internal controls, to capture new data and to address changes in financial reporting.
In depth US2014-01 is a comprehensive analysis of the revenue standard. This supplement discusses some of the more significant changes for insurance entities. Also refer to In transition US2015-08, The new revenue standard – changes on the horizon, for a summary of the changes to the new standard since its issuance.
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