The Financial Accounting Standards Board has announced a one-year delay for the start of its revised standard on revenue recognition. For publicly traded companies, the new standard will now become effective for reporting periods that begin after December 15, 2017 (and a year later for privately held companies). FASB developed its new revenue recognition standard to converge with that of the International Accounting Standards Board (IASB), which has also delayed its standard by a year. Writing in the Journal of Accountancy (see Don't Lose Momentum On Revenue Recognition Standard), Ken Tysiac and Maria Murphy assert that, despite the delay, “financial statement preparers need to keep pushing ahead on implementation as FASB and the IASB work to amend the converged standard.” They cite recommendations from reporting professionals and consultants that filers should not just continue implementation work but also keep abreast of changes and clarifications that the boards are likely to make in their standards before the effective date. “FASB generally has agreed to propose more clarifications and changes to the standard than the IASB,” the authors report. “This could make accounting difficult for global companies and reduce global comparability.” The areas in which the boards may make changes include intellectual property licenses, identification of performance obligations, contract modifications, sales tax presentation (gross versus net), noncash considerations, and collectability.
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