Revenue Recognition—Joint Project of the FASB and IASB
Last updated on June 3, 2014. Please refer to the Accounting Standards Updates Issued page for the final ASU.
(Updated sections are indicated with an asterisk *)
This project update summarizes the project activities and decisions of the FASB and IASB (the Boards). It was prepared by the staff and is for the information and convenience of the Boards’ constituents. All decisions of the Boards are tentative, may change at future Board meetings, and do not change current accounting and reporting requirements. Decisions of the Boards become final only after extensive due process.
*Due Process Documents
Project Objective and Summary of the Proposed Model
Decisions Reached at the Last Meeting
Summary of Decisions Reached to Date
Board/Other Public Meeting Dates
Related FASB Documents
SUMMARY OF DECISIONS REACHED TO DATE (as of May 28, 2014)
The Summary of Decisions Reached to Date is provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final Accounting Standards Update.
See ASU 2014-09 and IFRS 15.
BOARD/OTHER PUBLIC MEETING DATES
The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.
Below is a list of the FASB Board/Public meetings for this project with links to the minutes for each meeting.
|November 6, 2013||Board Meeting—Due Process Summary and Costs-Benefits Analysis|
|October 30, 2013||FASB/IASB Joint Meeting—Constraint on estimates of variable consideration, Licenses, Collectibility|
|September 17 and 18, 2013||FASB/IASB Joint Meeting—Collectibility, Constraint and Licenses|
|July 24, 2013||FASB/IASB Joint Meeting—Collectibility, Accounting for contracts that do not meet Step 1 of the revenue model, Constraint—minimums requirements|
|May 24, 2013||FASB/IASB Joint Meeting—Application of the Model: Credit Card Reward Programs|
|May 23, 2013||Board Meeting—Consequential Amendments Relating to Transfers of Assets That Are Not an Output of the Entity’s Ordinary Activities|
|March 20, 2013||FASB/IASB Joint Meeting—Nonpublic entity considerations—Disclosures, Transition, Effective date, and Early application; Public entity—Effective date|
|February 20, 2013||FASB/IASB Joint Meeting—Disclosures: disaggregation of revenue; Disclosures: reconciliation of contract balances and analysis of remaining performance obligations; Disclosures: contract costs, onerous performance obligations, and qualitative information; Disclosures: interim disclosures; Transition, effective date, and early application|
|January 30, 2013||FASB/IASB Joint Meeting—Scope, Repurchase agreements, Effect of the revenue recognition on asset managers, Transfers of assets that are not an output of an entity’s ordinary activities, Update on outreach regarding disclosure and transition disclosure|
|December 17, 2012||FASB/IASB Joint Meeting—Allocating the transaction price, Contract costs, Effect of the revenue recognition model on some bundled arrangements, and Constraining the cumulative amount of revenue recognized—licenses|
|November 19, 2012||FASB/IASB Joint Meeting—Constraining the cumulative amount of revenue recognized, Collectibility, and Implementation guidance: licenses|
|October 18, 2012||FASB/IASB Joint Meeting—Contract modifications, Measuring progress toward complete satisfaction of a performance obligation|
|September 24 and 27, 2012||FASB/IASB Joint Meeting—Constraining the cumulative amount of revenue recognized, Collectibility, including accounting for contracts with customers that contain nonrecourse, seller-based financing, Time value of money, and Contract issues—distribution networks|
|July 19, 2012||FASB/IASB Joint Meeting—Identifying separate performance obligations, Satisfying performance obligations over time, Licenses, and Onerous contracts|
|May 22, 2012||FASB/IASB Joint Meeting—Comment letter summary—main issues, Summary of outreach activities, Redeliberations plan|
|October 19, 2011||FASB/IASB Joint Meeting—Revenue disclosures in interim reporting periods|
|September 19, 2011||Board Meeting—Effective date for nonpublic entities|
|July 21, 2011||FASB/IASB Joint Meeting—Effective date and early application|
|July 13, 2011||Board Meeting—Transition requirements for nonpublic entities|
|June 14-15, 2011||FASB/IASB Joint Meeting—Effect of the proposed model on telecom (and other) companies, Transition requirements, re-exposure of the revenue standard|
|June 8, 2011||Board Meeting—Rate regulated activities—alternative revenue programs, Disclosure requirements—applicability to nonpublic entities|
|May 31, 2011||FASB/IASB Joint Meeting—Production costs under long-term production programs|
|May 17-18, 2011||FASB/IASB Joint Meeting—Amortization and impairment, Disclosures about assets from fulfillment and acquisition costs, Onerous contracts, and Disclosure and Presentation|
|April 12-14, 2011||FASB/IASB Joint Meeting—Determining the transaction price, Allocating the transaction price, Licenses and rights to use, Fulfillment costs, and Sale and Repurchase Agreements|
|March 23, 2011||FASB/IASB Joint Meeting—Collectibility and Uncertain Consideration|
|March 21, 2011||FASB/IASB Joint Meeting—Time value of money|
|March 1, 2011||FASB/IASB Joint Meeting—Onerous contracts|
|February 16-17, 2011||FASB/IASB Joint Meeting—Identification of separate performance obligations, Revenue recognition for services, Combining contracts, Contract modifications, Definition of a performance obligation, Breakage and prepayments for future goods or services, Onerous performance obligations|
|February 2, 2011||FASB/IASB Joint Meeting—Costs of obtaining a contract|
|February 1, 2011||FASB/IASB Joint Meeting—Warranties|
|January 20, 2011||FASB/IASB Joint Meeting—Segmenting a contract, Identifying separate performance obligations, Determining the transfer of goods and services|
|January 19, 2011||FASB/IASB Joint Meeting—Segmenting a contract, Identifying separate performance obligations, Determining the transfer of goods and services|
|December 14, 2010||FASB/IASB Joint Meeting—Comment letter summary—main issues, Summary of outreach activities, Redeliberations plan|
|November 17, 2010||FASB/IASB Joint Meeting—Oral Update|
|May 17, 2010||FASB/IASB Joint Meeting—Repurchase agreements and nonfinancial asset sales|
|May 5, 2010||Board Meeting—Effects of the proposed model on real estate transactions|
|March 22, 2010||FASB/IASB Joint Meeting—Scope|
|March 16, 2010||FASB/IASB Joint Meeting—Disclosure and Accounting for costs in contracts with customers|
|February 16, 2010||FASB/IASB Joint Meeting—Scope, Transition Requirements, and Effective Date|
|February 3, 2010||Board Meeting—Effects of the proposed model on existing cost guidance|
|January 18, 2010||FASB/IASB Joint Meeting—Disclosure|
|December 16, 2009||FASB/IASB Joint Meeting—Obligations for product warranties and product liability, Sale of goods with the right of return, Estimates of uncertain consideration|
|November 18, 2009||FASB/IASB Joint Meeting—Licensing contracts, Subsequent measurement of performance obligations, Contract costs|
|October 26, 2009||FASB/IASB Joint Meeting—Contract segmentation, Allocation of the transaction price, and Recognizing revenue in a contract segment|
|September 23, 2009||Board Meeting—The proposed model and receivables accounting, Control, and Options to acquire additional goods and services|
|August 19, 2009||Board Meeting—Presentation of contracts with customers|
|July 23, 2009||FASB/IASB Joint Meeting—Comment letter summary|
|June 10, 2009||Board Meeting—Gross versus net presentation of revenues, Combination, segmentation, and modification of contracts, and Nonmonetary exchanges|
|May 21, 2009||FASB/IASB Joint Meeting—Measurement of rights|
|April 1, 2009||Board Meeting—Measurement of rights|
|September 24, 2008||Board Meeting—Subsequent measurement of performance obligations|
|July 16, 2008||Board Meeting—Plan for completing the project and measurement of performance obligations.|
|May 14, 2008||Board Meeting—Draft of Chapter 5 and Board preference for Customer Consideration approach|
|April 21, 2008||FASB-IASB Joint Meeting—Overview of PAAinE Discussion Paper on Revenue Recognition|
|April 9, 2008||Board Meeting—Drafts of Chapters 2, 3, and 4 for the Discussion Paper|
|January 30, 2008||Board Meeting—Customer Consideration Model Measurement, Performance Obligations, and Examples|
|October 22, 2007||FASB-IASB Joint Meeting—Due Process, Measurement Model, Customer Consideration Model, and Examples|
|October 24, 2006||FASB-IASB Joint Meeting—Due Process Document|
|July 26, 2006||Board Meeting—Application of the Board’s Decision on the Meaning of Performance|
|April 27, 2006||FASB-IASB Joint Meeting—Accounting for Performance|
|March 1, 2006||Board Meeting—Accounting for Wholly Executory Contracts and Assessing when Performance has Occurred|
The IASB meeting summaries and observer notes for meetings from March 2006 can be found by clicking here. Meeting summaries for meetings before March 2006 can be found in the IASB Update, which is available by clicking here.
RELATED FASB DOCUMENTS
In January 2002, the FASB discussed the objective and scope of a potential major project on the recognition of revenues and liabilities in financial statements. That project would lead to a new comprehensive accounting standard on revenue recognition and also would amend the related guidance on revenues and liabilities in some of the FASB Concepts Statements. The Board issued a project proposal with a 60-day public comment period. In May 2002, after considering 32 comment letters on the project proposal, the FASB to its technical agenda a project to develop a comprehensive revenue recognition standard and to amend the related guidance on revenues and liabilities in some FASB Concepts Statements.The project started with two interrelated approaches that were pursued simultaneously—the "top-down" approach and the "bottom-up" approach. In the top-down approach, the staff developed conceptual guidance for the recognition and measurement of revenues that would form the basis of a new standard. In the bottom-up approach, the staff analyzed existing authoritative guidance and the revenue recognition principles and practices related to that guidance. The bottom-up approach identified various revenue models, which the Boards have considered in the development of a single revenue model for various industries.
In June 2002, the IASB added the revenue recognition project to its technical agenda. In September 2002, the FASB and the IASB formally agreed to work jointly on the revenue recognition project. The Boards will continue to share staff resources and work jointly to issue a final standard.
Before May 2005, the Boards were developing a revenue recognition model that would measure assets and liabilities at fair value (the so-called "fair value" or "measurement" model). (See Case in Point: Consumer Electronics Retailer for an example of that model.) In that approach, the Boards tentatively agreed that performance obligations should be measured at fair value—that is, the price that the reporting entity would have to pay an unrelated party to assume legal responsibility for performing all of its remaining obligations. However, some Board members had concerns about reasonably estimating those prices when they are not observable (which they often would not be). Other Board members had concerns about the pattern of revenue recognition when applying that model. As a result, the Boards agreed to develop an alternative model—the customer consideration model. In that model, performance obligations would be measured at an allocated customer consideration (that is, transaction price) amount.
In October 2006, the Boards decided to further develop both the fair value model and the customer consideration model. That initiative was undertaken by the staff using two small groups of Board advisors drawn from both Boards and was completed in July 2007. The Boards discussed the two models from October 2007 to May 2008. As a result of those discussions, the Boards coalesced around a single contract-based revenue recognition model. In May 2008, the Boards reached a preliminary view in favor of the allocated customer consideration approach of measuring performance obligations. The Discussion Paper, Revenue Recognition in Contracts with Customers, was issued in December 2008 and contained the Boards’ preliminary views on that allocated customer consideration approach.
In general, respondents to the Discussion Paper supported the Boards’ preliminary views. However, they asked the Boards to further develop those views in key areas such as how an entity would determine how to divide a contract into separate performance obligations, how to determine the amount of consideration to allocate to those performance obligations, and how an entity would determine when a performance obligation is satisfied. The Boards refined their proposals in the Discussion Paper while considering input from constituents through an extensive outreach program. In June 2010, the more fully-developed proposals were issued for public comment in the Exposure Draft, Revenue from Contracts with Customers.
Additional information about the project and the Boards’ proposals can be found in the Background Information and Basis for Conclusions section of the Exposure Draft.