The International Accounting Standards Board (IASB) has voted to defer the application of the revenue recognition standard issued in convergence with its US counterpart, the Financial Accounting Standards Board (FASB) in May 2014.
The two standard-setting bodies started working on the project more than a decade ago to clarify how and when to record sales as revenue – a process that has been the source of many high-profile cases of corporate corruption.
The decision to defer the application of IFRS 15 Revenue from Contracts with Customers, follows that of FASB, which on 9 July voted in favour of the deferral, having listened to implementation concerns raised by its constituents.
The IASB decision came also after a public consultation that ended on 3 July and confirmed that the effective date of 1 January 2017 was premature.
IFRS 15 will be effective by 1 January 2018, but voluntary use of the standard is permitted.
IASB and FASB have worked together through a so-called Transition Resource Group (TRG) to support companies in the transition to the new standard.
As a result of the TRG meetings, both boards decided to propose some clarifications to the standard.
The IASB expects to publish its proposals towards the end of July and aims at finalising any clarifications by the end of the year.
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