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The revenue standard includes an accounting policy election that permits reporting entities to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost rather than as an additional promised service.
- 3.6 Shipping and handling
US GAAP. IFRS. ASC 606 allows entities to elect to account...
- 3.6 Shipping and handling
14 mar 2017 · Accounting for shipping and handling is changing under the new revenue recognition standard (ASC 606), creating a new difference with IFRS (IFRS 15).
US GAAP. IFRS. ASC 606 allows entities to elect to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost rather than an additional promised service. IFRS 15 does not provide this election.
3 lip 2018 · ASC 606, as amended and clarified by ASU 2016-10, states that shipping and handling activities that occur before the customer obtains control of the related good are fulfillment activities (i.e., not a separate performance obligation).
Accounting Guidance Under ASC 606. ASC 606 addresses two primary questions when FOB or CIF shipping arrangements exist: When does transfer of control occur? Is the shipping service a separate performance obligation?
This publication discusses the areas in which the final revenue standards (ASC 606 and IFRS 15, Revenue from Contracts with Customers) are expected to have the greatest impact for companies in the transportation and logistics industry, broken down by step of the model.
Why the new standard matters to the shipping industry. The shipping industry will be affected by the new standard given that bareboat, time-charter contracts and other arrangements that are widely used in the industry will typically fall under the definition of a lease.
