United States

IFRS Newsletter: Revenue – Problems with Principals

Mar 30, 2015
From the Financial Reporting View and the IFRS Institute

The March 2015, Issue 13 of KPMG ISG’s IFRS Newsletter: Revenue – Problems with Principals summarizes the March meeting of the FASB and the IASB at which the Boards discussed proposed amendments to their respective standards about revenue recognition to provide additional practical expedients for transition. Specifically, the Boards discussed:

  • Principal-agent considerations – The Boards asked the staff to conduct further research, with the objective of clarifying how to apply the control principle.
  • Presentation of sales taxes – The FASB decided to permit a practical expedient that would allow a company to elect as an accounting policy presenting sales taxes on a net basis.
  • Collectibility considerations – The FASB decided to clarify how the collectibility criterion applies when assessing contract existence, and the meaning of contract termination.
  • Noncash consideration – The FASB decided to clarify that noncash consideration is measured at contract inception, and how to apply the constraint.
  • Transition to the new standard – The Boards decided to add further practical expedients to the transition options.

The Boards may consider additional changes at future meetings, and plan to discuss the effective date of the new standard in the second quarter of 2015.

Read KPMG ISG’s IFRS Newsletter: Revenue – Problems with Principals

Read Defining Issues 15-11