1.1 Background

The boards’ 2008 discussion paper on revenue recognition represented a significant milestone in the project. The project picked up momentum with the issuance of the June 2010 ED, for which the boards received nearly 1,000 comment letters. Then, in November 2011, the boards issued their revised ED after conducting extensive outreach and redeliberating almost every aspect of the original proposal. After further outreach and deliberations, the boards modified the proposal and issued the final standard in May 2014.

The following month, a joint FASB/IASB TRG was created to research standard-related implementation issues and help the boards resolve questions that could give rise to diversity in practice. Throughout the remainder of 2014 and 2015, the full TRG met and discussed topics that preparers, auditors, and industries had elevated to the TRG’s attention. In addition, the FASB-only version of the TRG met in April 2016 and November 2016. With the help of input from the TRG, the boards issued additional revenue guidance and interpretations (see Chapter 18 for more information). Both the FASB and the IASB have indicated that no future TRG meetings are scheduled and that the TRG will not meet unless additional significant, pervasive issues are identified. However, the FASB has indicated that stakeholders may submit inquiries through its technical inquiry process.4

In January 2016, the IASB issued an announcement that it had completed its decision-making process related to clarifying the revenue standard and that it did not plan to schedule any additional TRG meetings for IFRS constituents. However, the FASB continued to address implementation issues. As noted above, two FASB-only TRG meetings were held, one in April 2016 and the other in November 2016. At the November 2016 FASB-only TRG meeting, the FASB announced that no additional TRG meetings were scheduled. However, the FASB encouraged stakeholders to continue submitting implementation questions either directly to the TRG or through the FASB’s technical inquiry process. While it acknowledged that it would be open to scheduling future TRG meetings to discuss implementation issues that are significant and far-reaching, the FASB noted that it would be judicious in selecting topics, partly because the Board did not want to disrupt the implementation activities of entities that were adopting the standard as of January 1, 2017. As of the issuance date of this publication, there have been no additional TRG meetings since November 2016.

In August 2017, the SEC issued SAB 116, which effectively rescinded the SEC’s legacy revenue recognition guidance in SAB Topic 13, Securities Exchange Act Release No. 23507, and Accounting and Auditing Enforcement Release No. 108. As part of this update, the SEC’s legacy guidance on bill-and-hold arrangements is no longer applicable upon the adoption of ASC 606 (i.e., entities should look to the guidance in the revenue standard to determine the appropriate accounting for bill-and-hold arrangements). Refer to Section 8.6.9 for additional information on bill-and-hold arrangements. In addition, SAB 116 notes that SAB Topic 8 will no longer be applicable for retail companies. Further, SAB 116 modified the miscellaneous disclosure guidance in SAB Topic 11.A. For additional information about SAB 116 and other relevant SEC activities, refer to Chapter 18.