FASB finalizes amendments to principal-agent guidance in new revenue standard
Defining Issues | March 2016
KPMG reports on ASU 2016-08, which amends ASC 606 principal-agent guidance.
The FASB clarifies the principal-agent analysis, which focuses on control of the goods or services prior to transfer to customers.
Applicability
ASU 2016-08
- Company that is currently assessing the impact of the new requirements of ASC 606
- Company that is at an advanced stage of its ASC 606 implementation
- Company that is comparing US GAAP to IFRS
Effective dates
Mandatory effective dates and early adoption provisions:
Effective date | Public business entities and certain not-for-profit entities | All other entities |
Annual periods – Fiscal years beginning after | Dec. 15, 2017 | Dec. 15, 2018 |
Interim periods – In fiscal years beginning after | Dec. 15, 2017 | Dec. 15, 2019 |
Early adoption allowed in fiscal years beginning after | Dec. 15, 2016 | Dec. 15, 2016 |
Key Impacts:
- Companies will need to re-evaluate their principal-agent conclusions using the new guidance as they prepare to adopt the new revenue standard.
- The IASB is expected to issue identical amendments to its revenue standard to maintain convergence between US GAAP and IFRS.
Report contents
- Determination of nature and control of goods or services
- Determination of principal and agent
- Next steps
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FASB finalizes amendments
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