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.
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