IASB proposes revenue recognition clarifications

By Ken Tysiac

The International Accounting Standards Board (IASB) addressed financial statement preparers’ concerns Thursday by proposing clarifications and transition relief related to the new revenue recognition standard.

An exposure draft proposes amending IFRS 15, Revenue From Contracts With Customers, in response to concerns preparers voiced through the Joint Transition Resource Group that the IASB and FASB set up following the May 2014 release of the converged standard.

FASB also is proposing changes to its version of the new revenue recognition standard, and plans to seek comment in a number of exposure drafts. But the amendments the boards have proposed differ in some cases. Both boards recently voted to delay the effective date of the standard by one year, in part to give preparers time to implement the changes they are proposing.

The exposure draft published Thursday by the IASB would clarify:

  • 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).
  • How to determine whether a license provides the customer with a right to access or a right to use the entity’s intellectual property.

The exposure draft also proposes transition relief for two areas where implementation has been a concern.

The IASB is seeking comment, which can be submitted on the board’s website, by Oct. 28. The IASB plans to complete its discussion on this topic by the end of 2015 and issue amendments to the standard afterward.

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

SPONSORED REPORT

How to make the most of a negotiation

Negotiators are made, not born. In this sponsored report, we cover strategies and tactics to help you head into 2017 ready to take on business deals, salary discussions and more.

VIDEO

Will the Affordable Care Act be repealed?

The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

QUIZ

News quiz: Scam email plagues tax professionals—again

Even as the IRS reported on success in reducing tax return identity theft in the 2016 season, the Service also warned tax professionals about yet another email phishing scam. See how much you know about recent news with this short quiz.