FASB and IASB Release Revised Joint Accounting Standard for Revenue Recognition | Practical Law

FASB and IASB Release Revised Joint Accounting Standard for Revenue Recognition | Practical Law

The FASB and IASB jointly issued a revised exposure draft on a proposed accounting standard for revenue recognition.

FASB and IASB Release Revised Joint Accounting Standard for Revenue Recognition

Practical Law Legal Update 7-512-6388 (Approx. 3 pages)

FASB and IASB Release Revised Joint Accounting Standard for Revenue Recognition

by PLC Corporate & Securities and PLC Finance
Published on 15 Nov 2011 • USA (National/Federal)
The FASB and IASB jointly issued a revised exposure draft on a proposed accounting standard for revenue recognition.
On November 14, 2011, the FASB and the IASB issued a revised exposure draft of the proposed joint accounting standard for revenue recognition from contracts with customers. A joint exposure draft was originally issued for comment on June 24, 2010 (for more information on the original draft, see Legal Update, FASB and IASB Release Proposed Joint Standard for Revenue Recognition). The core principle of the revised proposal on revenue recognition remains the same, but several aspects of the guidance have been simplified or clarified in response to feedback received by the FASB and IASB. The revisions include:
  • Adding guidance on how to determine when a good or service is transferred over time.
  • Simplifying how an entity would determine a transaction price.
  • Modifying the scope of the onerous performance obligations test to apply to long-term services only.
  • Permitting an entity to recognize, as an expense, certain costs of obtaining a contract (if one year or less).
  • Simplifying the proposals on warranties.
  • Providing exemption from some disclosures for non-public entities that apply US GAAP.
The FASB and IASB are accepting public comments on certain questions and provisions in the revised exposure draft until March 13, 2012.