Note: Since issuing the new revenue standard in May 2014, the FASB and IASB have proposed various amendments to the guidance. This In depth has not been updated to reflect all of the proposed changes. See In transition US2015-08, The new revenue standard — changes on the horizon, for a summary of the changes, their impact, and the areas where the FASB and IASB have taken different approaches.
The FASB and IASB issued their long-awaited converged standard on revenue recognition on May 28, 2014. Almost all entities will be affected to some extent by the significant increase in required disclosures. But the changes extend beyond disclosures, and the effect on entities will vary depending on industry and current accounting practices.
This industry-specific supplement to our In depth publication highlights some of the areas that could create the most significant challenges for U.S. GAAP reporters in the mining industry as they transition to the new standard.
Entities in the mining industry regularly enter into complex contractual arrangements relating to the sale of products. The complexities around pricing and delivery are likely to be affected to some extent by the new standard, including requirements to identify separate performance obligations and determine the extent to which transaction prices are subject to the risk of significant reversal. The new requirements could affect the timing and measurement of revenue recognized. There is also a significant increase in the disclosure required.
For a comprehensive analysis of the new standard, read In depth: Revenue standard is final – A comprehensive look at the new model.
© 2016 - 2020 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.