Appendix F — Roadmap Updates for 2023 | DART – Deloitte Accounting Research Tool

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Appendix F — Roadmap Updates for 2023

Throughout the 2023 edition of this Roadmap, references to ASC 840 have been removed to reflect the FASB's removal of the ASC 842 transition guidance and ASC 840 legacy guidance from the Codification. Other substantive changes made in the 2023 edition are summarized in the tables below.

New Content

Section	Title	Description
3.2.4.1	Identifying and Accounting for Boot in an Inventory Buy/Sell Arrangement	New section that discusses the accounting for inventory buy/sell arrangements that are within the scope of ASC 845 and include cash in the exchange. The section includes new Example 3-9; subsequent examples have been renumbered accordingly.
3.2.4.2	Nonmonetary Exchange Involving Cash	New section that discusses the accounting for nonmonetary exchanges that include significant monetary consideration. One of its subsections includes new Example 3-10; subsequent examples have been renumbered accordingly.
3.2.5.1	Nonmonetary Exchange Transactions	New section that discusses the accounting for the sale of goods or services in exchange for primarily nonmonetary assets. The section includes new Examples 3-11 and 3-12; subsequent examples have been renumbered accordingly.
4.4.1.1.1	Termination Clauses That Include Refunds for Prepayments in Software Arrangements	New section that discusses accounting considerations related to software arrangements in which a customer prepays for a term-based license and PCS but can terminate all or part of the arrangement and receive a refund. The section includes new Examples 4-6 through 4-11.
4.4.1.1.2	License Keys and Termination Provisions	New section that discusses how termination provisions in a software licensing arrangement that requires the delivery of a license key for the customer to use the software affect the contract term and the recognition of revenue. The section includes new Example 4-12.
5.4.3.2.1	Determining Whether a SaaS Arrangement Represents a Stand-Ready Obligation or an Obligation to Provide a Specified Amount of Services	New section that includes indicators for an entity to consider when determining whether a SaaS arrangement represents a stand-ready obligation or an obligation to provide a specified amount of services.
5.6.1	Termination Clauses and Nonrefundable Up-Front Fees in Software Arrangements	New section that discusses how to account for termination provisions and nonrefundable up-front fees in software arrangements. The section includes new Examples 5-16 through 5-19.
6.6.2.5	Retail Industry Considerations	New section that combines content moved from Section 6.6.2.1 (including examples renumbered to 6-24 through 6-26) with additional discussion of consideration payable to a customer in the retail industry, especially in connection with advertising. One of its subsections includes new Examples 6-27 and 6-28; subsequent examples have been renumbered accordingly.
7.3.3.2.1	Appropriateness of Using the Residual Approach	New section that discusses when the residual approach should be used. The section includes new Examples 7-1 through 7-3; subsequent examples have been renumbered accordingly.
7.3.3.2.3	Material Right	New section that clarifies that a customer option to purchase additional goods or services may give rise to a material right even if the selling prices of those goods or services are highly variable or uncertain and the residual approach was therefore applied.
7.3.3.7	Methods for Establishing the Stand-Alone Selling Price for Term Licenses and PCS	New section that discusses how to determine stand-alone selling prices for term-based software licenses and PCS when observable pricing from stand-alone sales does not exist. The section includes new Examples 7-7 through 7-12; subsequent examples have been renumbered accordingly.
7.5.3.1	Allocating Variable Consideration in Cloud-Based or Hosted Software Arrangements	New section that discusses accounting considerations related to SaaS arrangements that require customers to pay a variable amount, usually based on the underlying usage of the technology. One of its subsections includes new Examples 7-18 through 7-24; subsequent examples have been renumbered accordingly.
9.2.2.2.2	Blend-and-Extend Contract Modifications Related to a SaaS Arrangement	New section that discusses three approaches to accounting for B&E contract modifications related to a SaaS arrangement. The section includes new Example 9-4; subsequent examples have been renumbered accordingly.
12.6.4.1	Initial Contract Includes a Cloud Conversion Right	New section that discusses the accounting for on-premise term-based software license contracts that include the right to convert the on-premise software license to a SaaS arrangement. The section includes new Example 12-24; subsequent examples have been renumbered accordingly.
12.6.4.2	Initial Contract Is Modified to Convert a Term-Based License to SaaS	New section that discusses the accounting for on-premise term-based software license contracts that initially do not include the right to convert the on-premise software license to a SaaS arrangement but are subsequently modified to immediately convert the on-premise software license to a SaaS arrangement. The section includes new Example 12-25; subsequent examples have been renumbered accordingly.
12.6.4.3	Initial Contract Is Modified to Add a Cloud Conversion Right	New section that discusses the accounting for on-premise term-based software license contracts that initially do not include the right to convert the on-premise software license to a SaaS arrangement but are subsequently modified to add a right to convert the on-premise software license to a SaaS arrangement. The section includes new Example 12-26; subsequent examples have been renumbered accordingly.
12.6.4.4	Initial Contract Includes Cloud Mixing Rights With a Cap	New section that discusses the accounting for a contract that gives the customer the right to use licensed software on an on-premise basis and a cloud basis, subject to a cap on the total number of seats. The section includes new Example 12-27; subsequent examples have been renumbered accordingly.
13.3.6	Relationship Between ASC 985-20 and ASC 340-40	New section that discusses how to account for costs of software developed in connection with contracts that require significant production, modification, or customization of the software.
13.5.1.1	Providing for Anticipated Losses	New section that discusses the application of the guidance in ASC 605-35 on onerous contracts, which has remained in effect after the adoption of ASC 606.
13.5.3	Separately Priced Extended Warranty Contracts and Product Maintenance Contracts	New section that discusses the recognition of losses resulting from separately priced extended warranty or product maintenance contracts.

Amended or Deleted Content

Section	Title	Description
On the Radar		Added a discussion of the November 10, 2023, public roundtable on the FASB’s postimplementation review of ASC 606 and removed the video “FASB Postimplementation Review.”
3.2.5.2	Barter Credit Transactions	Content moved from Section 3.2.5 and expanded to include a discussion of the substance, purpose, and economic benefit of barter credit transactions.
4.3.1	Each Party Has Approved the Contract and Is Committed to Perform	Added a discussion of trial periods and factors for an entity to consider when determining whether a contract with a customer exists during a trial period.
4.4.1	Termination Clauses and Penalties	Expanded the discussion to clarify that the economic considerations related to forgoing a discount on optional purchases would not be viewed as a substantive penalty suggesting that the parties’ rights and obligations extend for a longer contract term.
4.4.1.1.2	License Keys and Termination Provisions	Renumbered from Section 12.3.4; subsequent sections have been renumbered accordingly.
5.4.3.1	Assessing Whether a Promise Is a Stand-Ready Performance Obligation	Added a bullet point about SaaS to the list of examples of stand-ready performance obligations.
6.6.2.1	Meaning of “Distinct” Goods or Services	Some content (including examples renumbered to 6-24 through 6-26) moved into new Section 6.6.2.5 and a subsection thereof on consideration payable to a customer in the retail industry, especially in connection with advertising.
7.3.3.2.2	Allocating the Transaction Price When a Value Relationship Exists	Content moved from Section 7.3.3.2.
8.7.3	Residual Value Guarantees	Added a discussion to clarify whether a residual value guarantee should be accounted for under ASC 460.
8.7.4	Right of First Refusal and Right of First Offer in Connection With a Sale	Added a discussion related to right of first offer clauses in sale-and-leaseback arrangements.
9.2.2.2.1	Blend-and-Extend Contract Modifications in the Power and Utilities Industry	Content moved from Section 9.2.2.2.
10.3.2	Timing of Revenue Recognition When the Entity Is An Agent	Added Examples 10-7 and 10-8 to illustrate how the timing of revenue recognition by an entity acting as an agent may vary depending on whether the entity’s promise of arranging for goods or services to be transferred by the seller is satisfied when the arrangement is made or when the specified goods or services are transferred by the seller to the buyer. Subsequent examples have been renumbered accordingly.
12.3.4	License Keys and Termination Provisions	Deleted; subsequent sections have been renumbered accordingly.
12.3.5	Identifying Performance Obligations in a Hybrid Software Arrangement	Renumbered from Section 12.3.6. Added an excerpt from Example 9-2-3 of the AICPA Audit and Accounting Guide Revenue Recognition.
12.7.5.2	Application of the Sales- or Usage-Based Royalty Exception to Guaranteed Minimum Royalties Related to Symbolic IP	Added Example 12-38 to illustrate the applicability of three approaches to recognizing revenue over time when a sales- or usage-based royalty contract with a customer includes a minimum guaranteed amount of consideration.
14.3	Refund Liabilities	Added a discussion to clarify that funds received in advance that are associated with a cancelable term (with a termination right without penalty) should be presented separately from any contract liability as a refund liability, or similar liability.
14.6.2	Refund Liabilities	Added a discussion of how to determine whether refund liabilities should be classified as current or noncurrent.
14.7.2.2	Offsetting Refund Liabilities Against Accounts Receivable	Added a discussion of accounting for refund liabilities and accounts receivables for contracts with termination clauses.
14.7.6	Interaction Between ASC 606 and SEC Regulation S-X, Rule 5-03(b)	Content moved from Section 15.2.1.
15.2.1	Interaction Between ASC 606 and SEC Regulation S-X, Rule 5-03(b)	Updated to clarify that the line item presentation requirements of SEC Regulation S-X, Rule 5-03(b), cannot be satisfied solely by meeting the requirements of ASC 606 related to the disaggregation of revenue.
15.2.2	Disaggregation of Revenue	Added a discussion of the types of comments the SEC staff issued to registrants regarding the disaggregation of revenue.
Appendix A	Differences Between U.S. GAAP and IFRS Accounting Standards	Updated to clarify differences between U.S. GAAP and IFRS Accounting Standards in their treatment of (1) shipping and handling activities and the presentation of sales (and other similar) taxes, for which an accounting policy election is available only under U.S. GAAP, and (2) share-based payments to customers.

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