Cullen Walsh, assistant director of FASB said at FEI’s Corporate Financial Reporting Issues conference in New York that as the Transition Resource Group (TRG) established by FASB and IASB receives feedback from stakeholders, it is considering a need to possibly defer the implementation date to provide additional preparation time.
“The FASB has received requests to defer the effective date of the new revenue standard beyond 2017,” Walsh said. “The staff plans to perform outreach with preparers and some others across a number of different industries, and in particular focusing on some of the industries we think are most impacted by the new standard.”
The standard, Revenue from Contracts with Customers, was adopted in May to replace current revenue requirements under U.S. GAAP and IFRS. Companies filing under GAAP face a January 1, 2017, implementation date, while companies using IFRS have an option to adopt the standard earlier.
As the transition period continues, Walsh said the FASB staff plans to have detailed discussions about the transition method entities have selected, implementation challenges they’re facing, whether there should be a deferral of the effective date, and potential costs associated with a deferral.
FASB plans to complete the outreach effort early next year, and will post the feedback it receives before convening a full board meeting to discuss a possible deferral.
“We’ll be working as quickly as possible on this because we recognize you need clarity on this answer, one way or the other, and we are trying to [provide] that by early 2015.”
Speaking to reporters after the session, Walsh said IASB is also reaching out to stakeholders about a potential deferral of the implementation date.
“Ideally we would have a joint board meeting where both boards can hear about the research and both boards could make a decision,” he said.
Walsh said FASB has received opinions advocating both sides of a potential delay. Some companies have asked for additional implementation time, while others see no need.
“We’re looking at [a deferral] seriously,” he said. “We plan to do an intense amount of outreach in the short term to have discussions with those involved in implementation, including those companies we think will most impacted by the new standard, and ask FASB and IASB to make a decision in the near term on this decision.”