Patricia McConnell, a member of the IASB, provides her perspectives on the new accounting requirements for revenue recognition.
On 28 May 2014, after extensive consultation and deliberations spanning several years, the IASB and the US Financial Accounting Standards Board (FASB) jointly issued converged accounting standards on the recognition of revenue from contracts with customers. The IASB’s standard is known as IFRS 15 Revenue from Contracts with Customers.
With revenue as the ‘top line’ metric that is crucial to many investment decisions, the issuance of IFRS 15 is a significant milestone in financial reporting. Not only will IFRS 15 lead to better alignment between a company’s revenue and performance, but it will also provide a one-stop shop for revenue accounting for companies that use IFRS and US GAAP, regardless of which sectors or capital markets they operate in. This, in turn, will help investors in their analysis and comparison of these companies.
Read the full article: Revenue recognition: finally, a Standard approach for all