17.3 Unit of Account
ASU 2017-05 clarifies that the unit of account is defined as a distinct
nonfinancial asset.1 At the inception of a contract, an entity should therefore identify each
distinct nonfinancial and in-substance nonfinancial asset in accordance with the
guidance on identifying distinct performance obligations in ASC 606 (see Chapter 5). The entity should
then, in a manner consistent with the approach outlined in ASC 606 (see Chapters 7 and 8), allocate consideration to
each distinct asset and derecognize the asset when a counterparty obtains control of
it.
Footnotes
1
In paragraph BC53 of ASU 2017-05, the FASB clarified that
for a partial sales transaction structured as the sale of an ownership
interest in a consolidated subsidiary, “an entity should evaluate whether it
transfers control of the distinct underlying asset and not the ownership
interest” in the legal entity that holds the asset.