Revenue Recognition ConvergenceSqueezing your company into the one-size-fits-all approach |
Accounting for revenue is about to go through its most significant change in years. The International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) (collectively, the “Boards”) are progressing forward with their joint project to issue a converged revenue recognition standard.
The Boards expect to complete their re-deliberations during the third quarter regarding the Exposure Draft, Revenue from Contracts with Customers, which would establish a single revenue recognition model for contracts with customers. They are expected to issue a final standard by the end of 2011. The expected changes may not only impact how a company accounts for revenue, but may impact their systems, processes, and controls.
Will your policy require some tailoring?
While many revenue arrangements should fit nicely within the new approach, others could result in changes to your existing recognition practices. Some examples – based on the proposals in the exposure drafts – include:
- Percentage of completion
- Sell-through-type arrangements
- Contingent considerations
- Variable consideration and royalties
- Modifications
Deloitte’s publication, Revenue recognition convergence: Squeezing your company into the one-size-fits-all approach, highlights some of the expected changes and key implementation challenges which may lie ahead and explains how we can help you evaluate – and ultimately implement – this new accounting guidance.
Download the PDF below to learn more.
Revenue recognition convergence
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