May 1, 2017
The American Institute of CPAs’ Financial Reporting Committee has released a new working draft on how telecommunications companies can deal with an issue related to the new revenue recognition standard.
The Financial Accounting Standards Board and the International Accounting Standards Board released the revenue recognition standard in 2014. It will take effect for annual periods beginning after Dec. 15, 2017 for public companies and Dec. 15, 2018 for private companies. To help with the transition, the AICPA FinREC has been producing documents to help various industries deal with different revenue recognition issues since the standard itself eliminates most industry-specific rules. The latest one is a working draft on the effect of the time value of money for telecommunications entities. When it’s finalized, it will go into an overall Revenue Recognition Guide. FinREC is looking for feedback on the proposed guidance by July 3, 2017.
Separately, the AICPA released guidance last week on internal controls relevant to audits. Question and Answer (Q&A) section 8200.17–.21 (AICPA Technical Questions and Answers) includes nonauthoritative guidance in the area of internal control. The document aims to address various questions from auditors and other members about what is meant, in AU-C section 315, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (AICPA, Professional Standards), by controls relevant to the audit and control activities relevant to the audit.