IASB will propose to defer the effective date of IFRS 15

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28 Apr, 2015

In its afternoon session today on IFRS 15 issues, the IASB has just decided to propose to defer the effective date of IFRS 15 'Revenue from Contracts with Customers' to 1 January 2018.

In this decision, the IASB followed its staff's recommendation included in an agenda paper for the meeting. The staff had argued that since IFRS 15 is a converged standard with US GAAP it would be "less confusing for the market if both IFRS and US GAAP preparers apply the new Standard at the same time". The US FASB has recently tentatively decided to defer for one year the effective date of its new revenue standard (ASU 2014-09 Revenue from Contracts with Customers) for public and nonpublic entities reporting under US GAAP. The IASB staff had also pointed out that the IASB is considering proposing some limited clarifying amendments to IFRS 15, so a degree of uncertainty regarding what IFRS 15 will finally look like that cannot be completely removed until the IASB decides to either finalise, or not proceed with, these amendments. The staff also mentioned that even if these clarifying amendments have a different effective date than the standard itself, many entities might to wish to apply the amendments at the same time as they first apply IFRS 15 to avoid repeated changes of their accounting methods.

The IASB granted these points and decided to propose to defer the effective date of IFRS 15 by one year to 1 January 2018. The IASB staff has been asked to prepare an exposure draft to this effect, which will be a stand-alone exposure draft only dealing with the effective date so it can be processed more quickly. The exposure draft will have a comment period of no less than 30 days and is expected to be issued in May 2015.

EFRAG's recommendation to the European Commission to adopt IFRS 15 without deferral of the effective date is not negatively affected by today's decision of the IASB as EFRAG recommends adoption of IFRS 15 in the European Union "with the effective date set by the IASB".

Please see also our observer notes from the meeting,  Need to know newsletter on the IASB's tentative decision and the IASB's corresponding press release.

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