IASB & FASB Revenue Recognition

Introduction & Intent of Project The International Accounting Standards Board (IASB) and The Financial Accounting Standards Board (FASB) have undertaken a joint revenue recognition project that clarifies the principles for recognizing revenue that can be applied consistently across various transactions, industries, and capital markets. This project will apply to all contracts with customers except leases, financial instruments and insurance contracts. The joint project will attempt to remove inconsistencies and weaknesses in existing revenue recognition standards by retrofitting, and thoroughly improving the recognition framework. The project provides a single revenue recognition model to improve comparability over a range of firms and industries (foreign & domestic), and simplifies the preparation of financial statements by lowering the number or requirements to which preparers must refer. The following research assignment discusses; the status of the overall International Financial Reporting Standards project, what some of the major changes in Generally Accepted Accounting Principals will be, and how theses changes will effect the preparation of the financial statements. It will then provide positive and negative reviews from users, ending with an overall opinion on the usefulness of the proposed changes.
Status of Project Currently, the memorandum on revenue recognition is in the re- deliberation phase, and has been since March 13, 2012; when the comment period on the last exposure draft (Nov 11) ended. Between September 2012 and May 2012, the Boards and staff of the project held over 200 events and meetings in numerous countries around the globe to attempt to get this project publicized and completed. As of November 16, 2012, IASB staff met with advocates from a number of groups to provide an update on the Board’s re-deliberations on the 2011 Exposure draft “Revenue from Contracts with Customers” and to obtain feedback on some of the topics that