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 2026

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

Shiny new offices like Ryan’s in London Bridge aren’t just a cost – they signal that a firm is willing to align with its clients’ interests
Darren Graves will succeed Richard Houston, who is set to lead Deloitte EMEA; in other news, Morgan Lewis hired a three-partner tax team in New York
India also signed its first-ever bilateral APAs with France, Ireland, Indonesia and Sweden last year, the CBDT revealed
Chile’s revamped GAAR marks a shift toward structural scrutiny, pushing MNEs to strengthen tax governance, economic substance and compliance strategies
New reforms represent the most seismic shift in Canadian TP legislation since its enactment and a clear inflection point for MNEs, ITR has heard
Spain did not transpose EU VAT rules for SMEs or works of art; in other news, an increased VAT threshold came into force in South Africa
While the IBS incorporates taxable events previously covered by state and municipal taxes, its governance and operational logic represent a significant departure from the legacy model
The new office on the fourth floor of 4 More London will span 14,230 square feet, with the potential to expand to the first and second floors
MNEs now face a shift from modelling to execution as the side‑by‑side deal forces tax teams to upgrade systems, harmonise data, and prevent costly pillar two mismatches
As recent surveys suggest a disconnect between AI adoption and employee engagement, the big four risk digging themselves into a strategic hole
Gift this article