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On the Horizon -- FASB proposes more changes to revenue standard

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FASB issues proposed ASU on additional corrections to revenue standard
EITF announces agenda for September 22 meeting
SEC releases small entity compliance guide
AICPA issues report on audit quality



FASB issues proposed ASU on additional corrections to revenue standard

The Board issued the proposed ASU, Technical Corrections and Improvements to Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), Additional Corrections, that will affect narrow aspects of the guidance issued in the new revenue standard. The amendments in this proposed ASU include four additional items brought to the Board’s attention after the initial deliberations of the proposed ASU, Technical Corrections and Improvements to Update No. 2014-09, Revenue from Contracts with Customers (Topic 606).

The amendments in the proposed ASU would

  • Change the guidance in ASC 310, Receivables, and in ASC 942, Financial Services – Depository and Lending, to clarify that financial guarantees within the scope of ASC 460, Guarantees, are excluded from the scope of the new revenue standard
  • Reinstate certain guidance on the accrual of advertising expenses that was superseded by the new revenue standard
  • Amend Example 38, Case B, “Contract Liability and Receivable – Noncancellable Contract,” in ASC 606 to improve the alignment of the example with the receivables presentation guidance included elsewhere in the new revenue standard
  • Remove the reference to “contract liability” from the journal entry in Example 40, “Receivable Recognized for the Entity’s Performance,” in ASC 606

The effective date and transition requirements for the proposed amendments would be the same as those for the new revenue standard as follows:

  • For public companies: Annual periods, including interim periods therein, beginning after December 15, 2017
  • For private companies: Annual periods beginning after December 15, 2018 and interim periods beginning after December 15, 2019

Early adoption would be permitted.

Comments on the proposed guidance are due October 4.



EITF announces agenda for September 22 meeting

The EITF will meet on September 22, 2016 to discuss the following issues:

  • Issue No. 16-A, “Statement of Cash Flows: Restricted Cash”
  • Issue No. 16-C, “Accounting for Service Concession Arrangements”

Discussion materials, including a summary of the issues, are available on the FASB website.



SEC releases Small Entity Compliance Guide

Small Entity Compliance Guides summarize and explain rules adopted by the SEC, but they are not a substitute for SEC rules. Only an SEC rule provides complete and definitive information regarding its requirements.

The staff of the SEC’s Division of Corporation Finance recently issued a Small Entity Compliance Guide to summarize key provisions of the Commission’s Final Rule, Disclosure of Payments by Resource Extraction Issuers.

The Final Rule requires resource extraction issuers that engage in the commercial development of oil, natural gas, or minerals and are required to file an annual report under the Securities Exchange Act of 1934 to disclose certain payments made to the U.S. federal government and to foreign governments.



AICPA issues report on audit quality

The AICPA issued a report, “Enhancing Audit Quality: Highlights and Progress 2016,” detailing the activities and accomplishments resulting from its Enhancing Audit Quality initiative. The report summarizes the work done to enhance audit quality in the areas of pre-licensure, standards and ethics, learning and support, peer review, practice monitoring, and enforcement.




© 2016 Grant Thornton LLP, U.S. member firm of Grant Thornton International Ltd. All rights reserved. This Grant Thornton LLP On the Horizon provides information and comments on current accounting and SEC reporting issues and developments. It is not a comprehensive analysis of the subject matter covered and is not intended to provide accounting or other advice or guidance with respect to the matters addressed in this publication. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this publication. For additional information on topics covered in this publication, contact a Grant Thornton client-service partner.