The Financial Accounting Standards Board (FASB) today voted to propose a deferral of the effective date of the new revenue recognition standard by one year.
Based on the Board’s decision, public organizations would apply the new revenue standard to annual reporting periods beginning after December 15, 2017. Nonpublic organizations would apply the new revenue standard to annual reporting periods beginning after December 15, 2018.
Public organizations would apply the new revenue standard to interim reporting periods within annual reporting periods beginning after December 15, 2017 (that is, a public organization would be required to apply the new revenue standard beginning in the first interim period within the year of adoption). Nonpublic organizations would apply the new revenue standard to interim reporting periods within annual reporting periods beginning after December 15, 2019 (that is, a nonpublic organization would not be required to apply the new revenue standard in interim periods within the year of adoption).
Additionally, the Board decided to permit both public and nonpublic organizations to adopt the new revenue standard early, but not before the original public organization effective date (that is, annual periods beginning after December 15, 2016). A public organization would apply the new revenue standard to all interim reporting periods within the year of adoption. A nonpublic organization would not be required to apply the new revenue standard in interim periods within the year of adoption.
The FASB plans to expose its decisions for public comment in a proposed Accounting Standards Update (ASU). The proposed ASU will be open for public comment for thirty days after it is issued.
A complete summary of the Board’s decisions is available at www.fasb.org.
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