Deputy Seminar, Denver, CO

ASU 2014-09, Revenue from Contracts with Customers (Topic 606)

Scope – Credit Card Fees:

• Credit Card Fees – Generally not in scope of Topic 606; Topic 310, Receivables continue to apply – TRG members reiterated that entities should not default to the guidance in ASC 310 for all credit card arrangements; if the transaction includes goods or services that are “clearly unrelated” to the credit card arrangement, entities would need to perform additional analysis • If a credit card arrangement is within the scope of Topic 310, the associated rewards program would also be within the scope of Topic 310

ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ASU 2016-10 Identifying Performance Obligations & Licensing

Step 2: Identify performance obligations

Step 1: Identify contract with customer

Step 4: Allocate transaction price

Step 3: Determine transaction price

Step 5: Recognize revenue

 FASB did not expect entities to identify significantly more performance obligations than the deliverables identified today. However, the current SEC guidance on inconsequential or perfunctory performance obligations was intentionally not incorporated into the new standard  ASU 2016-10, clarifies entities would be allowed to disregard promises that are deemed to be immaterial in the context of the contract with a customer