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Update on the current board issues: April 2015

Audit committee issues

 

One-year deferral in the works for new revenue standard

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On April 29, 2015, the FASB issued a proposal to defer the effective date of the new revenue standard by one year Entities will still be allowed to adopt one year earlier (the original adoption date) if they choose. A day earlier, the IASB voted to issue a similar proposal that would defer the effective date by one year. Early adoption will still be permitted.

The FASB and IASB determined that a deferral is necessary to provide adequate time for many companies to effectively implement the new revenue standard.

Comments on the FASB’s proposed deferral are due May 29, after which the FASB will vote on whether to defer the standard. The IASB will issue an exposure draft on their proposed deferral in the near term.

For public entities using US GAAP, the FASB’s proposed deferral would result in the revenue standard being effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2017. For calendar year-end public entities, this means the 2018 interim and annual financial statements.

Similar to public entities, the FASB will also propose a one year deferred effective date for nonpublic entities. Nonpublic entities would be required to apply the revenue standard for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.

For more information on the FASB’s revenue recognition deferral, read PwC’s In the loop: New revenue guidance – where does it stand?