FASB's efforts to resolve challenges with the new revenue recognition standard continued when the board formally proposed targeted changes that are intended to clarify guidance related to identifying performance obligations and licensing.
The proposal stems from input the board received from the transition resource group that provides joint feedback on the converged standard to FASB and the International Accounting Standards Board (IASB), which have been working together to develop more uniform standards.
The IASB has agreed to propose changes to its own standard as a result of discussions with the joint transition resource group, but the boards' proposals will differ in some areas.
FASB's proposed Accounting Standards Update, Revenue From Contracts With Customers (Topic 606): Identifying Performance Obligations and Licensing, seeks to address areas where there is potential for diversity in practice.
The proposal also is designed to reduce the cost and complexity of applying the standard at implementation and on an ongoing basis. Comments were sought by June 30 at FASB's website.
The possible changes to the standard are one reason that FASB in May proposed a deferral in its effective date. The IASB proposed a similar delay.