Offering guidance for applying the Financial Accounting Standards Board’s (FASB) Accounting Standards Update (ASU) No. 2014-09, Revenue From Contracts With Customers, the American Institute of Certified Public Accountants (AICPA) has issued Audit and Accounting Guide (AAG): Revenue Recognition. The publication addresses issues to consider when auditors examine the revenue disclosed in financial statements, internal controls, fraud risks, and the assessment auditors must make on the accuracy of management’s estimates.
The AICPA’s revenue recognition guide is based on the efforts of the task forces that worked under their Financial Reporting Executive Committee since the FASB issued its landmark standard and the International Accounting Standards Board released International Financial Reporting Standards 15, Revenue From Contracts With Customers. The guide also reflects the guidance in ASU No. 2016-08, Revenue From Contracts With Customers (Topic 606): Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net); ASU No. 2016-10, Revenue From Contracts With Customers (Topic 606): Identifying Performance Obligations and Licensing; and ASU No. 2016-12, Revenue From Contracts With Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.
