FASB decides to defer revenue recognition

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

FASB decides to defer revenue recognition

fotolia-77736023-subscription-monthly-m-accountingstandards.jpg

Taxpayers which use US Generally Accepted Accounting Principles (GAAP) in their financial reporting will get an extra year to implement the new revenue recognition standard after the Financial Accounting Standards Board (FASB) decided at its meeting on April 1 to defer its effective date.

Those entities which follow US GAAP will now have to apply the standard (Accounting Standards Update 2014-09) to their annual and interim reporting for periods after December 15 2017, rather than a year earlier. Private companies will have another year after this to incorporate the standard into their annual reporting and another year after that, that is, December 15 2019, to use it for their interim reporting.

All companies, both public and private, will be allowed to adopt the standard earlier than December 15 2017 if they want to, but not before December 15 2016, the original effective date for public entities.

FASB’s board has directed staff to draft a proposed Accounting Standards Update, with a 30-day comment period, to reflect these decisions.

FASB and the International Accounting Standards Board, which oversees the development of International Financial Reporting Standards (IFRS), issued a converged standard on revenue recognition in May 2014.

At the time, a joint statement from the two organisations said:

“The core principle of the new standard is for companies to recognise revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements.”





more across site & shared bottom lb ros

More from across our site

Awards
Submit your nominations to this year's WIBL Americas Awards by January 23
Recent changes in UK tax rules and cross-border requirements are generating high demand for specialist advice, according to MHA
Hany Elnaggar examines how Gulf Cooperation Council countries are internalising transfer pricing norms within evolving fiscal systems shaped by both Islamic and international influences
Where a TP study of comparables produces an arm’s-length range, and the taxpayer’s filed position is outside that range, HMRC will adjust to the median by default
EY, KPMG, Deloitte, and PwC have all seen a decrease in public sector contracts since the scandal – it is understood
Consoli, a tax partner at Brazilian law firm Martinelli Advogados, tells ITR about the importance of staying at the coalface and constantly learning
Despite legislative gridlock, international investors should be wary of legal precedents set by recent court rulings, which could substantially alter the Spanish tax environment
The new outfit, Ashurst Perkins Coie, will bring together around 3,000 lawyers across 23 countries
As World Tax unveils its much-anticipated rankings for 2026, we highlight the two Brazilian firms that had a standout year of tier promotions
ITR understands that UK Chancellor Rachel Reeves will announce a consultation on the proposed financial reward scheme, which had left advisers fretting
Gift this article