A Roadmap to Applying the New Revenue Recognition Standard

This Roadmap provides Deloitte’s insights into and interpretations of the accounting guidance under the new revenue standard as codified in ASC 606, ASC 340-40, and ASC 610-20.

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Acknowledgments Preface Contacts Background Chapter 1 — Overview Chapter 2 — Symbols and Defined Terms Chapter 3 — Objective and Scope Chapter 4 — Step 1: Identify the Contract Chapter 5 — Step 2: Identify the Performance Obligations Chapter 6 — Step 3: Determine the Transaction Price Chapter 7 — Step 4: Allocate the Transaction Price to the Performance Obligations Chapter 8 — Step 5: Determine When to Recognize Revenue Chapter 9 — Contract Modifications Chapter 10 — Principal-Versus-Agent Considerations Chapter 11 — Licensing Chapter 12 — Contract Costs Chapter 13 — Presentation Chapter 14 — Disclosure Chapter 15 — Effective Date and Transition Requirements Chapter 16 — Nonpublic-Entity Requirements Chapter 17 — Sales of Nonfinancial Assets Within the Scope of ASC 610-20 Chapter 18 — Tax Considerations Chapter 19 — SEC, FASB, and Other Stakeholder Activities Chapter 20 — Implementation Activities Appendix A — Differences Between U.S. GAAP and IFRS Standards Appendix B — Codification Example Index Appendix C — Deloitte Q&A Index Appendix D — Summary of Revenue Implementation Issues Discussed by the TRG Appendix E — Chronological Listing of Revenue Implementation Issues Discussed by the TRG Appendix F — Roadmap for Implementation Appendix G — Status of AICPA Revenue Recognition Industry Task Forces’ Review of Implementation Issues Appendix H — Analysis of Incremental Disclosures for SEC Registrants in the Year of Adoption of the New Revenue Standard Appendix I — Changes Made in the 2019 Edition of This Publication Appendix J — Titles of Standards and Other Literature Appendix K — Abbreviations

Since the issuance of the new revenue standard on May 28, 2014, the FASB and the International Accounting Standards Board (IASB®), along with stakeholders from all industries, have focused on implementation efforts related to the adoption of ASU 2014-09 and IFRS 15 (and related ASUs and IFRS®Standards). Since the TRG’s initial formation in June 2014, there have been eight TRG meetings (including two FASB-only TRG meetings), at which 52 staff papers in aggregate were discussed. The feedback the FASB received through these meetings resulted in multiple ASUs amending aspects of ASC 606 and related topics in the FASB Accounting Standards Codification (the “Codification”).

The past several years have also seen significant activity by the 16 AICPA revenue recognition industry task forces. The task forces have worked on updates to the AICPA’s industry guides that address over 130 accounting matters related to revenue recognition, presentation, and disclosure.

The SEC staff has been active as well. In addition to monitoring implementation efforts and discussing its expectations for transparent disclosures, the staff has updated its revenue guidance with the issuance of SAB 116, which effectively supersedes SAB Topic 13. In addition, at the July 20, 2017, EITF meeting, the SEC staff provided significant relief to registrants that are required to include financial statements or financial information of other reporting entities in their SEC filings. Specifically, the SEC staff announced that it would not object to elections by certain public business entities (PBEs) to use the non-PBE effective dates for the sole purpose of adopting the FASB’s new standards on revenue and leases.

The 2019 edition of Deloitte's Revenue Roadmap includes additional interpretive guidance and examples that reflect all TRG activities, significant developments from the AICPA’s revenue recognition working groups, SEC activities, and our own interpretations. We hope that this update will enable you to navigate some of the more challenging aspects of the new revenue standard. This publication has been developed for readers who have been following every development of the standard, as well as for readers who have not been following all developments and may be working through the standard for the first time. That is, it may function as a quick resource guide for those who have a specific question and are looking for a clear answer, or it may serve as an all-encompassing guide for those who are still building up their knowledge base to lead or work through an implementation.

Although the new standard is now effective for most companies, challenging questions remain, including those that have yet to be asked. Accordingly, we will continue to develop guidance that we believe will help stakeholders with interpreting the new revenue standard.