On April 1, 2015, the Financial Accounting Standards Board (FASB) decided to defer the effective date of the new revenue standard, Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). This proposed one-year delay is intended to provide entities adequate time to effectively implement the new standard.
The new revenue standard, which was officially issued by the FASB in May 2014, standardizes how companies should recognize revenue in financial statements under US Generally Accepted Accounting Principles (GAAP).
As a result of the proposed deferral, public entities would apply the new revenue standard to annual reporting periods beginning after December 15, 2017 and the first interim period within the year of adoption. Nonpublic entities would apply the new revenue standard to annual reporting periods beginning after December 15, 2018 and the interim periods within the year of adoption.
Additionally, the FASB decided to allow both public and nonpublic entities to adopt the new revenue recognition standard early, but not before annual periods beginning after December 15, 2016 (which was the original public entity effective date).
The Board directed its staff to prepare an exposure draft which will have a 30-day comment period for the proposed update.
For more information on this update or other accounting standards, please contact your Aronson advisor at 301.231.6200.