The International Accounting Standards Board voted Tuesday to propose a one-year deferral of the revenue recognition standard that the IASB converged last year with the U.S. Financial Accounting Standards Board.
The IASB will issue an exposure draft proposing to defer the effective date until Jan. 1, 2018. It was originally set to take effect on Jan. 1, 2017.
Earlier this month, FASB also issued an exposure draft proposing to defer the effective date for U.S. companies after hearing feedback from many constituents who said they needed more time to implement the standard (see FASB Defers Revenue Recognition Standard for 1 Year). Under FASB’s proposal, public entities would apply the new revenue standard to annual reporting periods beginning after Dec. 15, 2017.
Nonpublic entities would apply the new revenue standard to annual reporting periods beginning after Dec. 15, 2018.
IASB officials have said in the past that they did not hear similar demands from their own constituents at companies based outside the U.S. But FASB and the IASB set up a joint Transition Resource Group last year that has been listening to requests for additional clarification and guidance. The IASB said Tuesday that the reason for deferring the effective date is that it is planning to issue an exposure draft with proposed clarifications to the revenue recognition standard, stemming from the joint TRG meetings, along with the desire to keep the effective date of the IASB’s and FASB’s revenue standards aligned.
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