FASB Issues Proposal on Recognizing and Measuring Deferred Revenue in Business Combinations
The Financial Accounting Standards Board issued a proposed Accounting Standards Update on the recognition and measurement of deferred revenue in business combinations.
The proposed ASU clarifies when acquiring organizations should recognize a contract liability in a business combination. In the proposal, an organization should recognize deferred revenue from acquiring another organization if there is an unsatisfied performance obligation for which the acquired organization has been paid by the customer.
The proposal was issued because diversity exists on whether and how to record deferred revenue in a business combination.
Contact Steve Quinlivan for more information.