Rev. Proc. Offers Automatic Accounting Change for 606 Book-Tax Accounting Conformity
An automatic method change is now available for taxpayers wishing to change their accounting method to comply with the new financial accounting standards issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) (“Topic 606”). Under the new standards of Topic 606, taxpayers recognize revenue from contracts with customers based on a five step process reflecting the expected consideration. Recently published Rev. Proc. 2018-29 provides taxpayers with an automatic method change, resulting in easier filing and more book-tax conformity. This will be available to taxpayers that wish to change their methods of accounting to comply with the new standards of Topic 606, and do so in their first, second or third taxable year ending on or after May 10, 2018. This Revenue Procedure does not provide guidance relating to section 451, but acknowledges that such guidance is forthcoming. Comments are requested from taxpayers regarding Rev. Proc. 2018-29, the conformity between the new standards and the Code, and what guidance would be helpful from the Treasury and IRS.
Read Rev. Proc. 2018-29
Read Topic 606: Revenue from Contracts with Customers