Last week, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) held a joint webcast to discuss implementation of the newly converged revenue recognition standards by the two governing bodies and many of the now-familiar refrains were hammered home – along with a few eye-opening tidbits.
Officials on the hour-long program held September 15 stressed the need for companies to speed up implementation of the massive overhaul of current U.S. GAAP, a change so all-encompassing that the effective date has already been pushed out a year, with more minor delays possible and questions still remain in the process.
Companies can no longer afford to delay preparation for the sweeping changes with a 2018 effective date, according to commentary from webcast participants.
“Both boards are clear that with the issuance of the key clarifying amendments earlier this year, the standard is stable, and entities should complete implementation with the confidence that the boards do not plan further changes,” said IASB member Mary Tokar, as reported in an article on the program by Thomson Reuters.
By replacing the current industry-specific guidance in U.S. GAAP with a more broad, principles-based way for businesses across the globe to compute revenue, officials of the governing agencies feel they’re within right of calling this the “crown jewel” of international accounting governance, which is just what IASB Chair Hans Hoogervorst did, according to Thomson Reuters.
“The standards introduce a comprehensive framework for addressing revenue recognition questions when they arise, when business models change, when new products or services are developed, and when economic conditions fluctuate,” said FASB Vice Chairman James Kroeker.
But will they truly be converged?
The TRG jointly established by both groups to help iron out issues is still considered to be ongoing as far as the FASB is concerned, while the IASB formally withdrew its participation in the group in January of this year. However, it was noted that the FASB is unsure if a TRG meeting scheduled for November will take place with only one issue on the agenda, a sign that issues are starting to taper off.
“I want to assure people we are committed to the continued collaboration so that we achieve the objective of a converged standard,” said Kroeker, according to Thomson Reuters.
Some other webcast highlights, as reported in a Bloomberg BNA account of the event: