SECTION 2. BACKGROUND

.01 On May 28, 2014, FASB and IASB jointly announced new financial accounting standards for revenue recognition, titled “Revenue from Contracts with Customers (Topic 606)”. See FASB Update No. 2014–09 and IASB International Financial Reporting Standard (IFRS) 15.

.02 Publicly-traded entities, certain not-for-profit entities, and certain employee benefit plans are required to adopt the New Standards for annual reporting periods beginning after December 15, 2017. All other entities are required to adopt the New Standards for annual reporting periods beginning after December 15, 2018. However, early adoption was allowed for reporting periods beginning after December 15, 2016. See FASB Update No. 2015–14, “Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date.”

.03 Rev. Proc. 2015–13, 2015–5 I.R.B. 419, as clarified and modified by Rev. Proc. 2015–33, 2015–24 I.R.B. 1067, and as modified by Rev. Proc. 2016–1, 2016–1 I.R.B. 1, and Rev. Proc. 2017–59, 2017–48 I.R.B. 543, provides the general procedures by which a taxpayer may obtain automatic con

sent of the Commissioner to a change in method of accounting described in the List of Automatic Changes. Rev. Proc. 2018–31 provides the List of Automatic Changes.

.04 Rev. Proc. 2018–29, as published in the Internal Revenue Bulletin on May 29, 2018, modified Rev. Proc. 2018–31 to provide the procedures for taxpayers that want to change their methods of accounting for the recognition of income for federal income tax purposes to a method of accounting that they use to recognize revenues under the New Standards. After Rev. Proc. 2018–29 was released, questions were received about whether Rev. Proc. 2018–29 applies to Early Adopters. This revenue procedure modifies the effective date in section 5.01 of Rev. Proc. 2018–29, and certain paragraphs of section 16.11 of Rev. Proc. 2018–31 to provide that this automatic method change applies to Early Adopters.