June 7, 2018
The Emerging Issues Task Force (EITF) met on June 7, 2018, and deliberated the following topics:
- Issue No. 17-A, “Customer’s Accounting for Implementation, Setup, and Other Upfront Costs (Implementation Costs) Incurred in a Cloud Computing Arrangement That Is Considered a Service Contract” (Issue 17-A): In summary, the EITF reached a consensus that a customer in a cloud computing arrangement that is a service contract should apply guidance on internal-use software to determine which implementation costs to recognize as an asset. In addition, the EITF reached decisions on other items, including scope, subsequent measurement, presentation and disclosure, and effective date.
- Issue No. 18-A, “Recognition under Topic 805 for an Assumed Liability in a Revenue Contract” (Issue 18-A): The Task Force discussed different alternatives for the recognition and measurement of an assumed liability from a revenue contract in a business combination. In summary, the EITF reached a consensus-for-exposure that the performance obligation concept in Topic 606 would be used to determine whether a liability assumed from a revenue contract with a customer is recognized by the acquirer in a business combination. The EITF also reached decisions on other items, including measurement and transition.
- Issue No. 18-B, “Improvements to Accounting for Episodic Television Series”: The EITF discussed the capitalization, amortization, impairment, and disclosure requirements for film costs. In summary, the EITF reached a tentative conclusion to align the cost capitalization guidance for episodic content with the guidance for films by removing the content distinction and maintain the current industry guidance on amortization. Further discussion on impairment, including the potential effects on amortization, and disclosures is expected at a future meeting.
- Accounting Standards Update 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments: The EITF discussed unsolicited feedback on Update 2016-15, related to the classification of cash flows from beneficial interests in securitization transactions.