Leawood, KS – December 15, 2019: The Financial Accounting Standards Board (FASB) issued ASU 2016-04 on Liabilities including Subtopic 405-20 on Extinguishment of Liabilities. The standards permit issuers of certain prepaid cards to recognize breakage revenue from debited stale card liabilities.
Public business entities were required to adopt Subtopic 405-20 for annual and interim reports beginning after December 15, 2017. All other entities were required to apply the standard to annual reporting periods beginning after December 15, 2018, and interim periods beginning after December 15, 2019.
ASU 2016-04 followed ASU 2014-09 in which the FASB released Topic 606 on Revenue from Contracts with Customers. Topic 606 also addressed recognition of breakage revenue from debited stale card liabilities. Topic 606 is subject to the same adoption dates as Topic 405.02.
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