Page 527 - Large Business IRS Training Guides

Topic 606

Key Take-Aways

• For financial reporting, Topic 606 may result in revenue

being recognized sooner than it was prior to Topic 606;

thus, an agent must gauge the effect of the adoption of

Topic 606 on tax reporting.

• For tax reporting, the effect of Topic 606 is seen in

• the new IRC § 451(b), which has an AFS rule that is

based upon the inclusion of revenue in the taxpayer’s

AFS, and

• the new IRC § 451(c), which codifies the one-year

deferral method and uses many of its key concepts

and terminology.

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