IASB votes to propose delaying effective date of revenue standard

By Ken Tysiac

The International Accounting Standards Board (IASB) voted Tuesday to propose a one-year delay in the effective date of the new, converged revenue recognition standard. The decision follows requests from financial statement preparers.

The proposal, which also would allow early adoption, keeps the IASB aligned with FASB, which voted April 1 to propose a similar delay. IASB members said that although international convergence is important, the needs of the IASB’s constituents were more important in their decision to propose a delay.

“Everybody underestimated how much work it takes to do these things [for implementation],” IASB member Gary Kabureck said during Tuesday’s board meeting.

Under the proposal, the effective date would be Jan. 1, 2018. The IASB plans to publish an exposure draft that would invite public comment, and would finalize its discussions on the issue at its board meeting in July.

Feedback the IASB received from financial statement preparers, particularly those in the telecommunications and automotive industries, requested a delay. Reasons cited by preparers, board members, and IASB staff for proposing a delay included:

  • The original publication of the standard in May 2014 was delayed by several months.
  • The IASB is proposing amendments to the standard that will require further analysis and work in implementation if they are approved. (FASB also is proposing changes to the standard.)
  • The timing of the release of new IT software solutions may make it difficult for some companies to be ready to implement the new standard by the original effective date.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA editorial director.

SPONSORED REPORT

CPEOs provide peace of mind around payroll services

The creation of these new IRS-certified service providers for small businesses clarifies some issues around traditional professional employer organizations.

QUIZ

News quiz: Senate health care bill in the spotlight

Reports related to the Republican bill to repeal many provisions of the PPACA, other tax issues, and the giant AICPA ENGAGE Conference offered a diverse reading list for June. See how much you know about recent news with this short quiz.