Revenue for chemical manufacturers
Industry Supplements | August 2017
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
Applying the new revenue recognition standard
- Chemical manufacturers
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
- New accounting model may affect the timing of revenue recognition
- Volume rebates and discounts could cause revenue deferrals
- Accounting for price changes will differ depending on their nature and the manufacturer’s pricing practices
- Take-or-pay arrangements may require multiple arrangements to be accounted for as one contract
Report contents
- Specific issues for chemical manufacturers
- Expanded disclosures
- Effective dates and transition
- Impact on the organization
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Revenue for chemical manufacturers
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Resource
Handbook: Revenue recognition
Latest edition: Our in-depth guide to the revenue standard, ASC 606, with Q&As, interpretive guidance and examples.
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