Project UpdatesRevenue Recognition—Joint Project of the FASB and IASBLast Updated: February 5, 2010 (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. Project Objective PROJECT OBJECTIVE The objective is to clarify the principles for recognizing revenue and to create a joint revenue recognition standard for US GAAP and IFRSs that companies can apply consistently across various industries and transactions. By developing a common standard that clarifies the principles for recognizing revenue, the boards aim to:
DUE PROCESS DOCUMENTS On December 19, 2008, the Boards published, for public comment, a Discussion Paper, Preliminary Views on Revenue Recognition in Contracts with Customers.
The Discussion Paper was open for public comment until June 19, 2009. In July 2009, the Boards considered a summary of comment letters received. The comment letters will be considered further as the Boards further develop the proposed revenue recognition model. The Boards expect to publish the Exposure Draft in 2010.*DECISIONS REACHED AT THE LAST MEETING (February 3, 2010) The Board considered the accounting for costs in contracts with customers. The Board decided that an entity should recognize as expenses all costs of obtaining a contract (for example, the costs of selling and marketing, including direct-response advertising). The Board also decided to develop guidance on how an entity should account for the costs of setting up and fulfilling a contract. The Board will consider the nature of that guidance at a future meeting. Next stepsThe Boards will continue their discussion of disclosures and consider scope, transition and additional cost guidance at the forthcoming meetings. |