IASB consults on changes to delayed global revenue standard
The International Accounting Standards Board (IASB) has opened a consultation on amendments to the new international rules on how companies record revenue.
It was announced earlier this month that the IASB voted to defer the new revenue standard – IFRS 15 Revenue from Contracts with Customers – by one year.
IFRS 15 will now come into force on 1 January 2018, bringing the effective date in line with the US Financial Standard Accounting Board and US GAAP.
The IASB is consulting on proposed clarifications to the revenue standard to support companies with its implementation.
The exposure draft proposes to clarify three things:
- How to identify the performance obligations in a contract.
- How to determine whether a party involved in a transaction is the principal (responsible for providing the goods or services) or the agent (responsible for arranging for the goods or services to be provided to the customer).
- How to determine whether a licence provides the customer with a right to access or a right to use the entity's intellectual property.
The IASB is also proposing two reliefs to aid the transition to the new revenue standard.
The FASB and the IASB issued the revenue recognition standard in May 2014 after work to harmonise US GAAP with international financial reporting standards.
The consultation is open for comment until 28 October 2015. The IASB expects to complete its discussions on these issues by the end of 2015, before the final amendments to the new revenue standard are issued.