ASC

ASC 605-915

Development Stage Entities

605 Revenue Recognition

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In brief

IntroductoryRevenueRecognitionTransition and effective datesFinancial statement presentation

ASC 605-915 formerly provided revenue recognition guidance specific to development stage entities (pre-revenue enterprises devoting efforts to establishing a new business). Every remaining paragraph in this subtopic (05-1, 15-1, 25-1) was superseded by ASU 2014-10, which eliminated the concept of a "development stage entity" from U.S. GAAP. As a result, there is no separate revenue guidance for such entities; they apply the same revenue recognition standards as any other entity.

Key points (4)
  • 605-915-05-1, 605-915-15-1, and 605-915-25-1 were all superseded by Accounting Standards Update No. 2014-10, leaving the subtopic with no operative guidance.
  • ASU 2014-10 removed the definition of and the incremental reporting requirements for development stage entities from the Codification, including the inception-to-date and other special presentation requirements formerly in Topic 915.
  • Because the special guidance is superseded, an entity in the development stage recognizes revenue under the general revenue model (now ASC 606) on the same basis as any other entity.
  • Nothing in this subtopic currently establishes recognition, scope, or overview rules; treat 605-915 as an empty shell retained only for cross-reference history.

For students. Useful mainly as a research trap: a citation to 605-915 (or Topic 915 generally) is stale because ASU 2014-10 eliminated development stage entity accounting. The common misunderstanding is thinking start-up or pre-revenue companies get special revenue rules or deferral privileges — they do not; apply ASC 606 like everyone else.

development stage entitysuperseded guidancerevenue recognitioninception-to-date informationstart-up enterprise

Machine-generated study aid for ASC 605-915. Check the source paragraphs below.

605-915-00Status

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605-915-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Development Stage EntitySupersededAccounting Standards Update No. 2014-1006/10/2014
915-605-05-1SupersededAccounting Standards Update No. 2014-1006/10/2014
915-605-15-1SupersededAccounting Standards Update No. 2014-1006/10/2014
915-605-25-1SupersededAccounting Standards Update No. 2014-1006/10/2014

605-915-05Overview and Background

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605-915-15Scope and Scope Exceptions

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605-915-20Glossary

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605-915-25Recognition

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Related subtopics