Preface
We are pleased to present the 2023 edition of
Revenue Recognition. This Roadmap provides Deloitte’s insights into and
interpretations of the accounting guidance in the revenue standard, which was issued
in May 2014 by the FASB as ASU 2014-091 and by the International Accounting Standards Board (IASB®) as IFRS
15.2
Since the original release of the
revenue standard, the FASB and IASB, along with stakeholders from all industries,
have focused on implementation efforts related to the standard’s adoption. In June
2014, a joint FASB/IASB transition resource group (TRG) for revenue recognition was
created to discuss implementation issues related to the revenue standard and help
the boards resolve any such issues that could give rise to diversity in practice.
There have been eight TRG meetings (including two FASB-only TRG meetings), at which
52 staff papers in aggregate were discussed.3 The feedback the FASB received through these meetings resulted in the issuance
of (1) multiple ASUs amending aspects of ASC 606 and related topics in the FASB
Accounting Standards Codification (the “Codification”) and (2) the FASB
staff’s Revenue Recognition Implementation Q&As compiled
from previously issued educational materials.
In addition, the 16 AICPA revenue recognition
industry task forces produced industry-specific interpretive guidance on the revenue
standard. The task forces have developed 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.
The 2023 edition of this Roadmap includes
additional guidance and examples that reflect (1) significant standard-setting and
SEC developments through November 10, 2023, and (2) our own interpretations in light
of those developments. Key changes made to this Roadmap since publication of the
2022 edition are summarized in Appendix F.
We hope that this update will enable
you to navigate some of the more challenging aspects of the revenue standard. This
publication has been developed for readers who have studied every aspect of the
standard, as well as for readers who may be working through the standard to
determine how to account for new revenue streams. 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 work through an implementation issue. We expect
additional implementation challenges to arise as (1) business models emerge or
evolve and (2) contracts are created or amended. Accordingly, we will continue to
develop guidance that we believe will help stakeholders with interpreting the
standard.
Be sure to check out On the Radar (also available as a stand-alone publication),
which briefly summarizes emerging issues and trends related
to the accounting and financial reporting topics addressed
in the Roadmap.
We encourage you to use this Roadmap as a guide
throughout your application of the revenue standard and to contact us with any
questions or suggestions for future improvements. However, the Roadmap is not a
substitute for consulting with Deloitte professionals on complex accounting
questions and transactions. We look forward to helping you address whatever
implementation questions you have.
Footnotes
1
For a list of the titles of standards and other literature
referred to in this publication, see Appendix D. For a list of
abbreviations used in this publication, see Appendix E.
2
As used in this publication, references to the revenue
standard may denote the guidance, as originally issued or amended, in (1)
ASU 2014-09 (or IFRS 15) broadly or (2) ASC 606 (or IFRS 15) on revenue from
contracts with customers specifically. In addition to the guidance in ASC
606 on revenue from contracts with customers, the guidance in ASU 2014-09,
as originally issued or amended, includes (1) the cost guidance in ASC
340-40 and (2) the guidance in ASC 610-20 on gains and losses on transfers
of nonfinancial and in-substance nonfinancial assets to noncustomers. IFRS
15, as originally issued or amended, includes the guidance on revenue from
contracts with customers and the related cost guidance but does not include
guidance similar to that in ASC 610-20 under U.S. GAAP.
3
In total, the FASB issued 60 TRG Agenda Papers consisting of
52 staff papers, 6 meeting summaries, and 2 research updates.