Ifrs in focus iasb issues revised exposure draft on revenue. Re exposure draft insurance contracts may 2002 iasb agreed to split insurance project into phase 1 and phase 2 comparatives mean opening balance sheet required as of 1 january 2020 companies reporting on calendar year basis early adoption possible, provided that the entity also applies ifrs 9 and ifrs 15 at the same time. With the revenue recognition revrec standard finalized the transition date was recently moved to 2018, the lease accounting standard has become the primary focus of the boards. I think though just as a reminder, sometimes there are business decisions that get made and it is not always wrong. New revenue recognition standard means big changes for. The software entities revenue recognition task force has been created to address issues which may arise due to fasbs new revenue recognition standard. Reexposure draft targeted q4 2012 threebucket model initial u. Paragraph 4 of as 9 defines, revenue as the gross inflow of cash, receivables, or. Draft ed20116 revenue from contracts with customers published reexposure. When the updated draft standard is re exposed later this year, the information provided here could potentially change. Round 2 for the exposure draft for a number of entities, the treatment of variable consideration under the revised model would represent a significant change from current practice. Re exposing the revised proposals will provide interested parties with an opportunity to comment on revisions the boards have undertaken since the publication of an exposure draft on revenue recognition in june.
Proposed implementation issues for revenue recognition. Aicpa financial reporting center revenue recognition task. In fact, differences continue to exist in standards for which convergence. Ifrs 17 why actuaries need to care willis towers watson. Iasb issues revised exposure draft on revenue recognition.
Impacts of revised exposure draft on revenue from contracts with customers on the insurance industry. This working draft offers guidance for the measurement requirements under asc 6061032, revenue from contracts with customers overall measurement, when a software. This exposure draft revenue from contracts with customers is published by the. The boards tentatively decided that the reexposure draft. However, the boards felt that given the importance of the revenue project and the volume of changes that have been proposed, it would be appropriate to reexpose the draft. To access fasbs revised exposure draft on revenue recognition, click here. On november 14, 2011, the iasb and the us fasb jointly issued a reexposure draft revenue from contracts with customers hereafter the revised ed which develops an entirely new revenue recognition. The board tentatively agreed to publish a limited scope exposure draft of the measurement uncertainty analysis disclosure, including the effect of correlation. Differences between gaap and ifrs on revenue recognition. The staff requested permission to publish a reexposure draft of the impairment model, adopt a 120day comment period for the reexposure draft and begin the balloting process. Introduction under the revised exposure draft on revenue recognition, the basic revenue recognition principle and model have not changed from the original proposal i. Regulations new revenue recognition standard means big changes for software companies. Notforprofit revenue recognition aug 22, 2017 the financial accounting standards board fasb has issued an exposure draft that aims to clarify the guidance on determining whether. However, we do have concerns that this exposure draft may have a negative impact on the telecommunication industry.
Exposure draft revenue from contracts with customers the exposure draft or the proposed standard we are pleased to respond to the invitation by the lasb and the fasb exposure draft, revenue from contracts with customers. As noted elsewhere, for example in the revenue recognition. Reed revenue from contracts with customers standard. Draft, which is likely to become a final standard in 2012. Exposure draft ed20116 on revenue from contracts with customers dear board members, the group of latin american accounting standard setters 1glass welcomes the opportunity to comment on the exposure draft amendment revenue from ontracts with ustomers the 2011 ed. Comments on draft realty transfer tax regulationsoct. The boards decided to reexpose the proposals because of the. Exposure draft, conceptual framework for financial. Welcome to the iasb update the iasb met in public from 1921 november 2012 at the iasb offices in london, uk. On november 2011, international accounting standard board iasb and financial accounting standard board fasb jointly released a revised exposure draft ed. Exposure draft revenue from contracts with customers the exposure draft or the proposed standard we are pleased to respond to the invitation by the lasb and the fasb exposure draft, revenue from contracts with customers consultation with members of the pricewaterhousecoopers network of firms, this response summarises. Joint revenue recognition project boards to begin redeliberations. Executive summary statement of position sop 972 provides guidance on applying gaap in recognizing revenue from software and software related transactions.
The planned reexposure of a revised revenue recognition exposure draft ed will give companies, auditors, preparers and analysts another opportunity to weigh in on this. The revised ed is the next step in developing an entirely new revenue recognition standard and follows extensive outreach and redeliberations on the proposals in the original ed. This note summarises the input received from european software companies fieldtests of the iasbs exposure draft revenue from contracts with customers. Ifrss have fewer requirements on revenue recognition, the two main revenue recognition standards, ias 18 revenue and ias 11 construction contracts, can be difficult to understand and apply.
Aicpa financial reporting center revenue recognition revenue recognition task force status of implementation issues on may 28, 2014, the financial accounting standards board fasb issued accounting standards update asu 201409, revenue. This terminology is consistent with the noweffective revenue recognition rules and newly. Discussions were also held with regard to leases, which also includes the existing deliberations that would result in the issuing of re exposure draft in the 1 st quarter of 20. Once effective, it will replace sop 811 and most existing revenue recognition and construction cost accounting guidance under u. What cfms need to know by jerry henderson and mike sobolewski on november 14, 2011, fasb and iasb issued their revised exposure draft on revenue recognition. Cfma is pleased to take this opportunity to comment on the proposed accounting standards update, revenue recognition topic 605. Currently in the reexposure draft, the changes to revenue recognition are. Overall, we support the efforts of the financial accounting standards board and the international accounting standards board the.
Daniel hassell, deputy secretary for tax policy dated dec. The revised ed is the next step in developing an entirely new revenue recognition standard and. Exposure draft revenue from contracts with customers. This exposure draft carries forward the 2016 change that replaces the term public entity with public business entity pbe in topic 740, income taxes, and differentiates disclosure requirements for pbes and organizations other than pbes. Russell golden technical director financial accounting standards board 401 merritt 7, po box 5116 norwalk, ct 068565116 by email. However, revenue measurement shall be based on concept of transaction price. Exposure draft ed20116 revenue from contracts with. Many commentators criticised a 2010 exposure draft. This analysis is based on the status of fasb and iasbs joint revenue recognition project as it was understood on july 15, 2011. Under the current revenue recognition model, collectibility is a recognition issue where no revenue. Collectibility refers to the customers credit risk and the ability to pay the entity the amount of promised consideration.
Revenue recognition has been one of the most difficult areas for the boards to tackle because of the wide range of revenue models used in the global economy. Cfma responded to the fasb revenue recognition reexposed draft topic 605. The boards are also working on other major joint projects, including one involving insurance contracts. We are responding to the invitation of the iasfas the boards to comment on the exposure draft, the ed on behalf of the. However, convergence efforts alone will not eliminate all differences between us gaap and ifrs. The pakistan accountant archive explore the institute of. Iasb ed leases draft comment letter page 5 of 36 b this approach creates an inconsistency, as ifrss would not require the recognition of liabilities for unavoidable firm commitments to acquire services, while at the same time requiring the recognition of possible liabilities for lease payments that are likely but not certain. Exposure draft history in june 2010, the boards released the original exposure draft that proposed a new revenue recognition.
In this direction, following is the exposure draft of the updated accounting standard as 18, revenue. The financial accounting standards board fasb released its initial major accounting standards update asu about revenue recognition. Ifrs 15 revenue from contracts with customers ifrs 15 was first issued in may 2014 and amended in september 2015 to defer the effective date to 1 january 2018. Jul 20, 2011 however, the exposure draft will be published in july so that it can be published on the same day as the equivalent fasb proposal.
The financial accounting standards board fasb and the international accounting standards board iasb are moving closer in convergence of financial instruments, revenue recognition and leasing accounting standards in particular. Exposure draft revenue from contracts with customers identifying performance obligations and licensing file reference no. Currently, ifrs preparers often defer measurement of variable consideration until revenue. Significant financing components in software arrangements. The sop provides instruction on recognition for licensing, selling, leasing or otherwise marketing software. The most notable change is that the boards have split on lessee lease classification and how lessees account. On 14 november 2011, the international accounting standards board iasb issued a reexposure draft ed2011xx revenue from contracts with customers the revised ed. Impairment and revenue recognition in addition to the redeliberation items. The committee on corporate reporting ccr of the financial executives international canada. Revenue recognition the proposed changes the international accounting standards board iasb and the financial accounting standards board fasb the boards released an updated exposure draft ed in november 2011. The fasb joined the iasb for some of the sessions via video from its. Exposure draft ed20106 revenue from contracts with. Re exposure of the proposed standard the boards agreed to re expose their revised proposals for a common revenue recognition standard.
Prior to addressing the actual terms of the exposure draft, we wish to frame our comments within the broader project in which cfma has been active for more than three years. Abstract the accounting standards committee of the american institute of certified public accountants issued a paper to the financial accounting standards board on the recognition of revenue on the sale and licensing of computer software. Ias 38 intangible assets or asc topic 985 on software, if applicable. They received more than 648 responses as of may 2015, many of which challenged the boards to address the classification controversy, complexity, and cost of implementation for lessees. Comments on exposure draft revenue from contracts with customers the corporate accounting committee cac of the securities analysts association of. Standards boards intention to develop a single principle for revenue recognition. The reexposure has allowed constituents to assess whether the revised requirements provide meaningful revenue information, are easy to understand and can be implemented in practice without unjustified costs or difficulties. The walt disney company is pleased to have the opportunity to comment on the exposure draft, revenue.
I think though just as a reminder, sometimes there are business decisions that get made and it is not always wrong for a contract term to impact. The new standard is aimed at reducing or eliminating those inconsistencies, thus improving comparability, and eliminating gaps in guidance. Jul, 2011 the planned re exposure of a revised revenue recognition exposure draft ed will give companies, auditors, preparers and analysts another opportunity to weigh in on this extremely important accounting area. Welcome iasb and fasb proposed new accounting standard for. Reporting standard ifrs set out in the exposure draft revenue from contracts with. We are pleased to comment on the exposure draft ed20106, revenue from contracts with customers the. The revised ed is the next step in developing an entirely new revenue recognition. Fasbiasb have announced that comments on the reexposed proposal were. As technology becomes further entrenched in consumer and enterprise products, companies outside of the traditional software. Exposure draft ed20106 revenue from contracts with customers. Exposure draft, proposed accounting standards update, revenue recognition topic 605 revenue from contracts with customers.
New lease accounting standard costar real estate manager. The fasb and the iasb are expected to issue the final standard on revenue recognition in the first quarter of 20. Well, the asc 606 revenue recognition standard, also. Handbook how to comply with the 2015 fasb lease accounting. The august 2010 lease exposure draft called for bringing lease obligations and the related assets onto the balance sheets of lessees. Why tax cant wait for the secs decision on ifrs cfo.
Ifrs in focus iasb issues revised exposure draft on. Exposure draft ed20116 on revenue from contracts with. On 14 november 2011, the international accounting standards board iasb issued a re exposure draft ed2011xx revenue from contracts with customers the revised ed. Both the boards also discussed topics pertaining financial instruments. Philadelphia bar association comments on draft realty transfer tax regulations dated nov. Technical guide on revenue recognition for software. Planned reexposure of revised revenue recognition standard. The revised ed is the next step in developing an entirely new revenue recognition standard and follows extensive outreach and redeliberations on the proposals in the original ed that was issued in.
The ed reflects the redeliberations of the iasb and the us financial accounting standards board fasb of a new comprehensive standard for revenue recognition. Iasb ed20116 revenue from contracts with customers is a re exposure of the proposals exposed by the iasb in its june 2010 exposure draft, ed20106 revenue from contracts with customers. Revenue recognition credit card reward programs iasb and fasb. Software licence b45 shipment of a product with risk of loss b46. For each draft revenue, this report displays the project for which it was created, its draft revenue number, the number of the draft revenue, if any, that it credits, the customer number, name, and agreement providing the funding, the accrue through date used to generate the revenue, and the total dollar amount of the draft revenue. Joint revenue recognition project boards to begin redeliberations on key issues. The board discussed whether there is a need to re expose a draft of an ifrs on fair value measurement. Asbj and iasb hold joint discussions on several accounting topics.
However, we do have concerns that this exposure draft. The committee on corporate reporting ccr of the financial executives international canada fei canada is writing to provide its response to the international accounting standards board iasb exposure draft ed ed20106 revenue from contracts with customers. By now, youve probably already heard of the term asc 606 but have no idea exactly how it will affect you or your employees. Software elimination of vsoe, so revenue can be recognised when license transferred revenue recognition for software development only if po over time criteria met media pharma revenue may be recognised on transfer of licence, but will need to consider if licence is right to use or right to access. Exposure draft revenue from contracts with customers comments to be received by 22 october 2010 ed20106. Feb 10, 2012 the revenue recognition exposure draft was re exposed in november 2011 and the lease exposure draft was issued in 2010 with the anticipation the boards will re expose the lease ed in 2012. The nature of our business is such that a large number. With relatively few issues remaining, it should be finalized and released by yearend 2015. Re exposing the revised proposals will provide interested parties with an opportunity to comment on revisions that the boards have undertaken since the publication of an exposure draft on leasing in august 2010. Exposure draft revenue from contracts with customers dear sir david.
Convergence of financial instruments, leasing, and revenue recognition for ifrs and us gaap. Revenue recognition joint session the iasb and the fasb met to continue their joint redeliberations on the revised exposure draft, revenue from contracts with customers the 2011 ed. Re exposure of the proposed standard the boards agreed unanimously to re expose their revised proposals for a common leasing standard. This revised exposure draft on revenue recognition is based on the same. Iasb and fasb publish revised proposal for revenue recognition.
We are responding to the invitation of the iasfas the boards to comment on the exposure draft, the ed on behalf of the apita group plc. On 14 november 2011, the international accounting standards board iasb issued a re exposure draft ed20116 revenue from contracts with customers. To support the iasbs effort in developing a robust standard for revenue recognition, efrag has, in addition to. Russell golden technical director financial accounting. As a member of the institute you are required to maintain the highest professional standards by conscientiously adhering to the values of the chartered accountants code of ethics and following the requirements of the chartered accountants ordinance, 1961, byelaws 1983 and the directives given in the members handbook referred to as the red book.
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