The new revenue standard must be adopted by public companies in 2018. Almost all entities will be affected to some extent by the new standard, though the effect will vary depending on industry and current accounting practices. Although originally issued as a converged standard under US GAAP and IFRS, the FASB and IASB have made slightly different amendments so the ultimate application of the guidance could differ under US GAAP and IFRS.
The revenue standard applies to transactions that are not in the scope of other guidance including specific guidance on financial instruments, which may differ between US GAAP and IFRS. Therefore, the revenue standard, although substantially converged, will not always be applied to the same population of transactions for a US GAAP entity as compared to an IFRS entity.
The Revenue Recognition Transition Resource Group (TRG) has discussed various implementation issues impacting companies across many industries. These discussions may provide helpful insight into application of the guidance and the SEC expects registrants to consider these discussions in applying the new standard.
This publication addresses implementation developments and highlights certain challenges specific to entities in the banking industry who report in US GAAP. This publication does not provide a comprehensive analysis of the impact of the new guidance on banking entities. The content should also be considered together with our Revenue guide.
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