AASB expresses concerns about revenue recognition project

The Australian Accounting Standards Board (AASB) has expressed concerns about the International Accounting Standards Board’s (IASB) revenue recognition project, which begun in September 2012.

In a letter to the IASB, the AASB said it is concerned about the possible re-introduction of a collectability threshold for revenue, and the introduction of rules-based requirements relating to proxies for measuring an entity’s performance.

The Australian standard setter also suggested that the collectability threshold is inconsistent with the proposed revenue recognition model; they also raise questions about the incorporation of credit risk into revenue measurement.