Directory
Accounting & Auditing
Revenue Recognition Proposal to Be Re-Exposed
By: Justin Roberts
Justin Roberts
Senior Manager
Manufacturing & Distribution
Springfield
417.831.7283
The joint project from the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) on revenue recognition continues to move forward. During the initial comment period, the boards received numerous comment letters leading to robust redeliberation, changes and refinements of the proposed standard.
On June 15, 2011, FASB and IASB announced they will release an updated exposure draft in the third quarter of 2011, adding the exposure period would last 120 days. This re-exposure is not required as a part of the boards’ usual due diligence, but due to the importance of revenue as a financial statement line item, re-exposure was determined to be the best way to avoid unintended consequences from the final standard.
The boards have agreed on numerous changes and clarifications to the original proposal in response to the large volume of comment letters. Some modifications to the original proposal include eliminating the requirement to segment certain contracts, clarifying the guidance on warranties and removing the requirement to adjust revenue recorded for the customer’s credit risk. For a complete list of the changes the boards have agreed to, visit the FASB website.
For more information on the revenue recognition project, please contact your BKD advisor.
Directory
Subscribe