Year long delay in implementing of FASB ASC 606 revenue recognition rules

Today Robert Cresanti, CEO of the International Franchise Association announced good news surrounding the year long-delayed implementation of the Federal Accounting Standards Board's (FASB)  ASC 606 revenue recognition rules.

While addressing the economic impacts of COVID-19 has been the IFA's primary focus over the last month, they have continued to press forward with other franchising priorities, particularly the 606 recognition rules as FDD filing deadlines looming ahead.

Over the last several weeks, IFA staff and members have had several important and direct conversations with FASB, including with the current Chair, Russell Golden, and other members of the Board and technical staff. Today’s announcement is the result of that – it’s even more impressive that this delayed implementation is exclusive to franchises!  

Following this morning’s decision, FASB will begin the process of taking public comment on an alternative accounting standard for private sector businesses (an “expedient”) that will allow the IFA to make the case that certain pre-opening costs are earned immediately and should be recognized as such.  More information to follow as they keep abreast of developments.

Understanding that many franchise brands have spent considerable time and resources on filings to date, it's encouraged you speak with your legal and auditing firms whether any amendments may be made to year-end audited financial statements.

In the meantime, please don’t hesitate to reach out to Suzanne Beall with any questions. We hope this bit of good news provides you with a little hope in the midst of the crisis.