FASB voted to delay both revenue recognition and leases for private entities at their May 20th meeting. The original proposal was for a delay for private company franchisors to receive a one year delay of revenue recognition. But the Board added all private entities that have not yet issued financials. In addition, both “public” and private nonprofits as well as all private entities receive an extra year (in addition to ASU 2019-10) for leases. ASU to be issued in June!
FASB has issued an Invitation to Comment (ITC) to the related proposed ASU, Business Combinations (Topic 805): Revenue from Contracts with Customers- Recognizing an Assumed Liability (the proposed update). While the proposed ASU provided recognition information, the EITF was unable to decide the proper measurement. The ITC offers alternative ideas for comment so they can decide which path to pursue. Comments are due April 30, 2019.
Business Combinations (Topic 805), Revenue from Contracts with Customers: Recognizing an Assumed Liability
This blog covers the first installment of Financial Accounting Standards Board (FASB)’s Valentines Day gift- a proposed Accounting Standard Update (ASU) related to deferred revenue in business combinations. Addressing diversity in practice, the proposal provides guidance on when deferred revenue should be booked in a business combination. The standard would help companies apply Topic 606 in a business combination. Comments are due April 30, 2019.