Dataline: Responses are in on the re-exposed proposed revenue standard -- Constituents voice their support...and concerns (No. 2012-04)

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Dataline 05/31/2012 by Assurance services
Dataline: Responses are in on the re-exposed proposed revenue standard -- Constituents voice their support...and concerns (No. 2012-04)

At a glance

The FASB and IASB released an updated exposure draft, Revenue from Contracts with Customers, on November 14, 2011. The boards received approximately 360 comment letters in response to the updated exposure draft, down significantly from the nearly 1,000 comment letters received on the exposure draft released in June 2010. Since issuing the updated exposure draft, the boards have continued extensive outreach efforts, including four public and numerous private, industry-focused roundtables. This PwC Dataline addresses the areas of focus in roundtables and in comment letters received by the boards on the updated exposure draft.

The FASB and IASB (the "boards") released an updated exposure draft, Revenue from Contracts with Customers, on November 14, 2011 (the "2011 Exposure Draft"). The boards received approximately 360 comment letters in response to the updated exposure draft, down significantly from the nearly 1,000 comment letters received on the exposure draft released in June 2010 (the "2010 Exposure Draft"). Since issuing the updated exposure draft, the boards have continued extensive outreach efforts, including four public and numerous private, industry-focused roundtables.

Through the updated exposure draft and other outreach efforts, the boards asked whether the proposed guidance is clear, and specifically requested feedback on: (1) performance obligations satisfied over time; (2) presentation of the effects of credit risk; (3) recognition of variable consideration and the revenue recognition constraint; (4) the scope of the onerous performance obligation test; (5) disclosures in interim financial reports; and (6) transfer of non-financial assets that are outside an entity's ordinary activities (for example, the sale of property, plant and equipment). Respondents have commented on the questions asked by the boards, but also on a number of other areas, including the application of time value of money, transition, and annual disclosures. Industries have also asked the boards to address or clarify the application of the proposals to certain industry-specific issues.

This Dataline addresses the areas of focus in roundtables and in comment letters received by the boards on the updated exposure draft.