ASC Topic 808
Collaborative Arrangements
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ASC 808 addresses collaborative arrangements — contractual joint operating activities between two or more active participants who share significant risks and rewards tied to the endeavor's commercial success and that are not primarily conducted through a separate legal entity (808-10-15-4 through 15-11). The Topic is essentially a presentation, classification, and disclosure standard rather than a recognition/measurement standard: third-party revenues and costs are reported gross or net under the principal-versus-agent guidance in 606-10-55-36 through 55-40, and payments between participants follow Topic 606 in full only when the counterparty is a customer for a distinct unit of account (808-10-15-5B; 808-10-45-1). Otherwise, an entity presents such transactions by analogy to other authoritative literature or under a reasonable, rational, consistently applied policy election, and may not commingle them with revenue from contracts with customers (808-10-45-3). The core idea: identify whether the counterparty is a customer for a distinct unit of account, because that determines whether Topic 606 or the collaborative-arrangement presentation and disclosure rules (808-10-50-1) apply.
Subtopics
- 10Overall46 ¶
ASC 808-10 defines collaborative arrangements — contractual arrangements involving a joint operating activity between two or more active participants who are exposed to significant risks and rewards dependent on the endeavor's commercial success, and that are not primarily conducted through a separate legal entity. The Topic governs income statement presentation, classification, and disclosure, not recognition or measurement generally. Third-party transactions are reported gross or net based on the principal-versus-agent guidance in Topic 606, and payments between participants are accounted for under Topic 606 only when the counterparty is a customer for a distinct unit of account; otherwise presentation is by analogy or a reasonable, rational, consistently applied policy election.