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In a recently accounting standard issued, FASB hopes to provide clarity on how an operating entity determines the customer of the operation services for transactions.
Accounting Standards Update No. 2017-10, Service Concession Arrangements (Topic 853):
Determining the Customer of the Operation Services (a consensus of the FASB Emerging Issues Task Force), addresses what stakeholders observed as diversity in practice regarding FASB Accounting Standards Codification (ASC) Topic 853.
The issue stems from service concession arrangements between a grantor and an operating entity. The operating entity will operate the grantor’s infrastructure—such as airports, roads, bridges, tunnels, prisons, and hospitals – during a specified time frame, according to the standard. The infrastructure may be preexisting or constructed by the operating entity during this time.
Read the Journal of Accountancy story here.