Revenue for retailers
Industry Supplement | September 2016
KPMG’s insights on ASC 606 implementation. With the new revenue recognition standard’s effective date approaching, KPMG reports on the most significant industry issues.
Applicability
- Retailers
Effective dates
Mandatory effective dates and early adoption provisions:
Annual periods:
For public business entities and certain not-for-profit entities the effective date for annual periods is the fiscal years beginning after Dec. 15, 2017.
For all other entites the effective date for annual periods is the fiscal years beginning after Dec. 15, 2018.
Interim periods:
For public business entities and certain not-for-profit entities the effective date for interim periods is the fiscal years beginning after Dec. 15, 2017.
For all other entites the effective date for interim periods is the fiscal years beginning after Dec. 15, 2019.
Early adoption:
For public business entities and certain not-for-profit entities the effective date for early adoption is the fiscal years beginning after Dec. 15, 2016.
For all other entites the effective date for early adoption is the fiscal years beginning after Dec. 15, 2016.
Key impacts
- The new revenue model may impact the timing of revenue recognition associated with sales incentives, gift card breakage and online purchases.
- Rights of return will be presented gross as a refund liability and an asset for recovery.
- Principal vs. agent analyses under the new standard may result in different conclusions for certain arrangements.
- Credit card arrangements require significant judgment and analysis to determine the appropriate accounting.
- Income statement presentation of gift card breakage, credit card arrangement income and sales taxes may change.
Report contents
- Specific issues for retailers
- Expanded disclosures
- Effective dates and transition
- Impact on the organization
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Resource
Handbook: Revenue recognition
Latest edition: Our in-depth guide to the revenue standard, ASC 606.
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