The Financial Accounting Standards Board could decide early in the second quarter of this year whether to propose a delay in implementation of the new standard on recognizing revenue from contracts with customers.
FASB and the International Accounting Standards Board have set a Jan. 1, 2017, implementation date for companies filing under GAAP, while those using IFRS have an option to adopt the standard earlier. But the boards are considering a delay amid complaints from some companies that they need more time to revamp their practices and systems to put the new standard into effect.
FASB staff members have been preparing a report on a possible deferral, reaching out to preparers and consulting with other interested parties such as auditors and financial statement users. At a meeting Monday, they said they will present their report to FASB early in the second quarter.
At that time, the Journal of Accountancy says, FASB will decide whether to propose a deferral.
The new standard, which the boards adopted in May, requires substantial disclosures around revenue, requiring the preparation of computations and data, particularly for companies with long-term contracts. The IASB has been having similar discussions to the FASB’s over whether its rule should be delayed.
According to the JoA, “The IASB has not received as much feedback requesting a delay in the effective date but has received letters from members of one industry expressing concern about readiness for implementation. Those concerns related more to the implementation of systems than accounting interpretations.”
FASB staff members are also researching three specific implementation questions related to the revenue recognition standard, and they plan to discuss two of them — intellectual property licenses and performance obligations in the context of a contract — with the board in February.
Source: Journal of Accountancy