iGAAP Alert: June 2010
IASB issues revenue recognition exposure draft
The IASB’s new revenue proposals could affect the recognition of revenues and profits for many entities, and in some cases the impact may be very significant.
Applying some of the new concepts, especially that of ‘control’ of a good or service, may require considerable judgement.
Some of the proposals may lead to outcomes that are counter intuitive, especially in relation to the allocation of revenue between distinct elements of a contract.
Entities should not underestimate the proposed disclosure requirements, which are very extensive.
In some cases, changes may be required to accounting systems.