Accounting

FASB Asks for Comment on Proposed Delay of Revenue Recognition Rules

By Steve BurkholderPublic companies would have until 2018 to apply new accounting rules on revenue under a new timetable from the Financial Accounting Standards Board.FASB's April 29 release of the exposure draft, reflecting a planned one-year deferral of the far-reaching revenue recognition standard (ASU No. 2014-09: Topic 606), Deferral of the Effective Date, is in response to concerns about lack of time for implementation voiced by software, telecommunications, technology and securities companies.Time Needed Companies such as Verizon Communications Inc., Adobe Systems, Symantec Corp. and AT&T Inc. have urged a delay because, they say, they would have trouble making the current Jan. 1, 2017 effective date for the standard. Copious systems changes would need to be made and those take time, the companies told FASB.Broker-dealers in securities, banks and other financial companies that are part of the Securities Industry and Financial Markets Association also asked for a delay of one year or longer for the similarly-worded FASB and International Accounting Standards Board revenue standards.FASB asks that comments on the proposed deferral be submitted by May 29. The board would allow application along the current, Jan. 2017 timetable for those companies that have already prepared for that current effective date.IASB Also Proposing One-Year Delay The IASB, which issued—with FASB—the jointly written revenue standard in May 2014, also is proposing a one-year delay for the rules.IASB voted 11-3 on April 28 to call for the deferral of the new standard (IFRS 15).The London-based international board changed its planned course for two reasons: to allow time for the issuance of new clarifying guidance on various topics raised by the boards' Joint Transition Resource Group for Revenue Recognition and to try to keep the effective dates of IASB and FASB rules aligned, according to an IASB news release.Apple's Worries About Out-of-Sync Dates Before IASB voted to float a one-year deferral of the revenue rules, Apple Inc. sent an unsolicited comment letter to that board and FASB.In the April 15 letter, the giant technology company's accounting chief described “complexities” Apple and other multi-national companies would face relating to effective dates.Apple's Chris Kondo wrote that the company supports FASB's proposed action on deferral of the U.S. standard. It then cited some of the challenges “that...

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