FASB ISSUES Proposed Accounting Standards Update (exposure draft) DERIVATIVES AND HEDGING (Topic 815) and REVENUE FROM CONTRACTS WITH CUSTOMERS (Topic 606)
The Board is issuing the amendments in this proposed Update to address stakeholders’ concerns about (1) the application of derivative accounting to contracts with features based on the operations or activities of one of the parties to the contract and (2) the diversity in accounting for a share-based payment from a customer that is consideration for the transfer of goods or services. The proposed amendments are expected to (a) reduce the cost and complexity of evaluating whether these contracts are derivatives, (b) better portray the economics of those contracts in the financial statements, and (c) reduce diversity in practice resulting from changing interpretations of the existing guidance. The proposed amendments also are expected to reduce diversity in practice by clarifying the applicability of Topic 606 to a share-based payment from a customer that is consideration for the transfer of goods or services.
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