The FASB has agreed to a one-year delay of the effective date for the new revenue reporting standard. Based on feedback from stakeholders and in light of forthcoming amendments to the new revenue standard, the FASB agreed to push back the implementation dates to allow adequate time for effective implementation. While the IASB is considering a similar one-year deferral of the new revenue standard, it has not released a final decision.
Public Entities: The new revenue standard is now effective for fiscal years and interim periods within those fiscal years that begin after December 15, 2017. For those who use a calendar year-end, the new revenue standard applies in their 2018 interim and financial statements.
Note: “Public entities” includes public business entities, not-for-profit entities that have issued, or are a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market, and employee benefit plans that file or furnish financial statements with or to the SEC.
Non-public Entities: The new revenue standard is now effective for fiscal years that begin after December 15, 2018 and interim periods within fiscal years that begin after December 15, 2019. For those who use a calendar year-end, the new revenue standard applies to their 2019 annual financial statements and to their 2020 interim financial statements.
Early Adoption: Early adoption of the new standard is permitted except for entities reporting under U.S. GAAP who must wait to adopt the standard. These entities may not apply the new revenue standard earlier than the original effective date for public entities or no sooner than 2017 for entities using a calendar year-end.
The delay is welcome relief for many as the implementation of the new revenue standard requires substantial change for their organizations’ systems and procedures. The question now will be whether to become an early adopter (meet the original effective date) or to delay the implementation of the new standard.
For questions or assistance in evaluating the appropriate implementation strategy, contact Greg Elpers, CPA, CCA at 800.880.7800 ext. 1352 or email@example.com