PracticeAccounting FirmsIASB plans to clarify revenue recognition rules

IASB plans to clarify revenue recognition rules

Proposed amendments address concerns raised by preparers at meetings of IFRS 15 transition group

IASB plans to clarify revenue recognition rules

THE IASB is consulting on proposed clarifications and transition reliefs to IFRS 15, the revenue recognition standard it launched with US standard setter FASB last year.

The proposed amendments address concerns raised by preparers at meetings of the Transition Resource Group, set up jointly be the two boards to help companies implement new rules on how companies record revenue on their books.

An exposure draft published by the IASB proposed clarifications on how to identify the performance obligations in a contract; how to determine whether a party involved in a transaction is the principal (responsible for providing the goods or services) or the agent (responsible for arranging for the goods or services to be provided to the customer); and how to determine whether a licence provides the customer with a right to access or a right to use the entity’s intellectual property.

In addition, the IASB has proposed two reliefs to aid the transition to the new revenue standard.

FASB has also proposed similar changes to its version of the new rules and the two boards are trying to remain aligned after releasing a converged standard following more than a decade of attempts to converge US GAAP with IFRS.

Earlier this month, the two boards decided to delay the standard by one year and defer the effective to 1 January 2018.

The consultation is open for comment until 28 October 2015. The IASB expects to complete its discussions on these issues by the end of 2015, after which the final amendments to the standard will be issued.

Related Articles

IASB to consult on interim measures for IFRS 9

Accounting Firms IASB to consult on interim measures for IFRS 9

2y Chris Warmoll, Writer
*NEW* Masterclasses: Cashflow/accounts/debt instruments under FRS 102

Accounting Firms *NEW* Masterclasses: Cashflow/accounts/debt instruments under FRS 102

3y Kevin Reed, Writer
Ex-KPMG senior partner to head Grant Thornton assurance

Accounting Firms Ex-KPMG senior partner to head Grant Thornton assurance

3y Naomi Rainey, Writer
Profession to play key role in integrated reporting

Accounting Firms Profession to play key role in integrated reporting

7y Kevin Reed, Writer
The SME world awaits the 'Rosetta Stone' of accountancy

Accounting Firms The SME world awaits the 'Rosetta Stone' of accountancy

8y Mario Christodoulou, Writer
IASB senior manager rejoins Duff & Phelps

Accounting Firms IASB senior manager rejoins Duff & Phelps

4y Rachael Singh, Writer
Money talks for IFRS conversion

Accounting Firms Money talks for IFRS conversion

7y Taking Stock
Think before taking international option for UK SME standards

Accounting Firms Think before taking international option for UK SME standards

7y Kevin Reed, Writer