How and when should securities brokers and dealers implement the new revenue recognition standard FASB ASC 606, Revenue from Contracts with Customers? Addressing this question in detail, this 2018 edition contains revenue recognition implementation issues, applying FASB ASC 606 and related interpretations from the FASB/IASB Joint Transition Resource Group for Revenue Recognition (TRG). Specifically, the following revenue streams are addressed:
Other related topics include: Scope; Costs associated with investment banking advisory services; and, Principal versus agent: Costs associated with underwriting. In addition, this guide includes interpretations from the TRG which may be relevant for management of asset management entities in applying FASB ASC 606. Specifically, the following revenue streams are addressed:
This guide also includes content from a recent AICPA Q&A which addresses the question, "Is a broker, dealer, or future commission merchant considered a public business entity?" This determination is important when implementing new accounting pronouncements, such as FASB ASC 606, on the appropriate effective date. Other updates to this edition are to conform the content to current accounting standards and regulatory requirements.