On April 1, 2015, the Financial Accounting Standards Board (FASB) voted to propose a one-year deferral of the effective date of the new revenue recognition standard, Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), for both public and private entities.
FASB’s decision was based on stakeholder outreach, meetings of the FASB/IASB Joint Transition Resource Group for Revenue Recognition, and forthcoming exposure drafts that would amend the new standard.
The proposal would result in the following effective dates for US GAAP reporting entities:
Fiscal years beginning after December 15, 2017 and interim periods within those years. Public entities with calendar year-ends would be required to apply the new standard beginning in their 2018 interim and annual financial statements.
Fiscal years beginning after December 15, 2018 and interim periods within fiscal years beginning after December 15, 2019. Nonpublic entities with calendar year-ends would be required to apply the new standard beginning in their 2019 annual financial statements and 2020 interim financial statements.
The FASB also voted to permit both public and nonpublic entities to adopt the new standard as early as the original public entity effective date (annual reporting periods beginning after December 15, 2016 and interim periods therein). Adoption prior to that date would not be permitted.
Today’s vote is not a final ASU. A final decision on the deferral will be subject to FASB’s due process requirement. The FASB plans to issue a proposed Accounting Standards Update with a 30-day comment period. The IASB has not yet discussed a potential deferral.
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