Industry Insights

Updated Revenue Guidance for Performance Obligations & Licenses

July 2016

Executive Summary

The Financial Accounting Standards Board finalized amendments to the revenue standard to clarify how companies should identify performance obligations and account for intellectual property licenses. Entities would be allowed to disregard promises deemed to be immaterial in the context of the contract with a customer. The amendments create an accounting policy election permitting entities to account for certain shipping and handling activities as an expense rather than as an additional deliverable.


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