The FASB has released a proposed Accounting Standard Update (ASU) Collaborative Arrangement (Topic 808): Targeted Improvements.

The proposed update is being issued to clarify the interaction between Topic 808: Targeted Improvements and Topic 606: Revenue from Contracts with Customers. The proposed amendments would affect all entities that have collaborative arrangements. A collaborative arrangement, as defined in Topic 808 is a contractual arrangement under which two or more parties actively participate in a joint operating activity and are exposed to significant risks and rewards that depend on the activity’s commercial success.