On August 12, 2015, the FASB finalized the April 2015 exposure draft and issued the anxiously awaited Accounting Standards Update (ASU) No. 2015-14, delaying by one year the effective date of Accounting Standards Codification 606, Revenue from Contracts with Customers (ASC 606). As a result of the ASU, public companies, certain not-for-profit entities, and certain employee benefit plans will be required to adopt ASC 606 in fiscal years beginning after December 15, 2017 and for interim periods within in the year of adoption. Those entities may early adopt ASC 606 only as of fiscal years beginning after December 15, 2016 and for interim periods within the year of adoption.
All other entities are now required to adopt ASC 606 in fiscal years beginning after December 15, 2018, and for interim periods in the year following the year of adoption. However, these other entities may early adopt ASC 606 in fiscal years beginning after December 15, 2016, and for interim periods beginning either in the year of adoption or one year after the year of adoption.
We advise our clients that rather than viewing the one year delay simply as a reprieve, it should be used as an opportunity to take the additional year to get ahead of the curve.
To find out how Puncel Consulting Associates can help you understand and plan for the new revenue recognition standard, contact us for a complimentary one hour consultation.
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