Comment on IASB/FASB 2011 ED on Revenues from Contracts with Customers (original) (raw)

2012, SSRN Electronic Journal

This document was prepared by the main authors, having received comments and suggestions from other members of the Committee. We mutually agree to sign a document when we consider it a valuable contribution to the assessment and understanding of the accounting issue (and proposed standard) under consideration. We thank Roshan Ajward for his valuable research assistance. Usual disclaimer applies. OVERVIEW The Exposure Draft ED/2011/6 on "Revenues from Contracts with Customers" (henceforth the ED) was jointly issued in November 2011 by the IASB and the FASB (henceforth the Boards). It plans to replace the current accounting standards for revenue recognition, respectively ASC Topic 605 (FASB) and related guidance, IAS 18, Revenue, and IAS 11, Construction Contracts (IASB). The Boards claim that the ED will improve financial reporting by creating a comprehensive revenue recognition standard that clarifies the principles for recognizing revenue and that can be applied consistently across various transactions, companies, industries and capital markets. If adopted, it is claimed that the standard would improve comparability, simplify the preparation, reduce the need for interpretative guidance

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