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FASB Clarifies Standard for Collaborative Arrangements

 

The Financial Accounting Standards Board released an accounting standards update (PDF) clarifying guidance on the interaction between some types of collaborative arrangements and the new revenue recognition standard. A collaborative arrangement is a contract in which two or more parties actively participate in a joint operating activity and are exposed to significant risks and rewards, depending on the commercial success of the activity. The update offers guidance on how to determine whether some transactions between participants in such an arrangement should be accounted for under the rev rec standard.