Members of an advisory council to accounting rulemakers say that revenue recognition should be the Financial Accounting Standards Board's top priority.

This marks the third year in a row that the issue topped the list in an annual survey of the Financial Accounting Standards Advisory Council, the group that advises FASB on issues related to projects on the board's agenda, possible new agenda items and project priorities.

Financial performance reporting, fair value, codification and simplification, and international convergence/short-term convergence rounded out the top five most pressing issues cited by the 28 FASAC members who responded to the survey.

However, council members wouldn't automatically assign a higher priority to projects that provide international convergence opportunities. When asked when assigning a priority to the five most important issues that the board should address if they would assign a higher priority to issues that would provide the opportunity to achieve international convergence, more than half of FASAC members responding said no.

Council members also don't believe that the board should always add a project to its agenda because its overseas counterpart -- the London-based International Accounting Standards Board -- does. A majority of respondents, even those who advocate for international convergence as a priority, don't think FASB should necessarily add a project to its agenda because the IASB does, with many citing the limits of the board's resources as a reason to not automatically do so.

Most FASAC members don't believe that the board should issue differential standards for certain entities. However, many do support the board's exploring differences in disclosures and transition periods on a case-by-case basis.

"I think having different accounting and reporting standards for different entities would be opening up a huge can of worms," commented council member W. Steve Albrecht. "For example, what is a big company and what is a small company? Is it private versus public? ... Organizations are not static. They go from big to little and little to big; from private to public and from public to private. ... It would be a standard-setting nightmare."

While most FASAC members support the board's efforts to create a codification of U.S. generally accepted accounting standards, some felt that the work on the codification shouldn't affect the progress on other important projects. The full report is available at http://www.fasb.org/fasac/results2004.pdf.

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