The New York State Society of CPAs has told the Financial Accounting Standards Board and the International Accounting Standards Board that they need to make changes in their latest set of proposals for changing revenue recognition standards.

In a comment letter sent to FASB and the IASB on March 7, the NYSSCPA said that while it agreed with the focus of Proposed Accounting Standards Update (Revised) – Revenue Recognition (Topic 605), the two boards still need to answer questions about the time frame related to measuring loss or revenue and burdensome reporting requirements.

The proposal aims to provide a more complete framework for addressing revenue recognition issues and removing inconsistencies from existing accounting practice requirements. The proposal would guide entities to recognize revenue from contracts with customers when it transfers the goods or services to the customer.

This proposal is a revision of an exposure draft that was released in 2010 and includes added guidance on how to determine when a good or service is transferred over time and a simplification of the proposals on warranties.

The NYSSCPA recommends the removal of the one-year threshold for measuring performance obligations that could allow an entity to reach different conclusions about nearly identical situations.

“It didn’t seem to be in the spirit of what FASB is proposing,” NYSSCPA Financial Accounting Standards committee member Sharon Sabba Fierstein said of the one-year time frame that goes against the trend of FASB to avoid bright lines with this proposal.

The additional quarterly reporting disclosures of contract assets and liabilities required in the proposal would also substantially increase both the costs to prepare and review financial statements. The NYSSCPA recommends a disclosure that incorporates high-level, qualitative discussion and highlights the nature and amount of significant change in contracts.

The NYSSCPA said it does agree with the proposed guidance governing constraints on the cumulative amount of revenue that an entity would recognize for satisfied performance obligations related to what the entity is reasonably assured to be entitled to.

“We recognized that the FASB has been responsive to previous comments from the public,” Fierstein said of FASB. “Overall we were supportive of the direction that the Board is taking.”

The comment period for the proposal closed on March 13. If enacted, the proposal would take effect for annual reporting periods beginning on or after Jan. 1, 2015.

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