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SEC chief accountant comments on transition to new revenue standard

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Mar 25, 2016

At the 12th Annual Life Sciences Accounting and Reporting Congress in Philadelphia, SEC Chief Accountant James Schnurr discussed transition activities related to the new revenue standard.

Mr. Schnurr spoke about developments of the revenue tran­si­tion resource group (TRG) which was formed jointly by the IASB and FASB to apprise the stan­dard set­ters of issues related to the im­ple­men­ta­tion of the converged revenue recog­ni­tion standard and diversity in practice.

In January of this year, the IASB announced that it will no longer attend TRG meetings, stating, “The Board is now of the view that stake­hold­ers need to know that they can continue their im­ple­men­ta­tion process with the con­fi­dence that IFRS 15 will not be subject to further changes.” The FASB declared in February that it will continue to address im­ple­men­ta­tion issues and has scheduled three TRG meetings for 2016.

Mr. Schnurr commented on the IASB’s decision as follows:

While I am op­ti­mistic that the key practice issues that require standard setting have been iden­ti­fied through the im­ple­men­ta­tion ac­tiv­i­ties of preparers, auditors and standard setters, I am concerned that there are still a number of questions that would benefit from the TRG process. . . . Without joint par­tic­i­pa­tion of the IASB’s TRG in the coming scheduled FASB TRG meetings, there is a concern that IFRS 15 may be in­ter­preted through a U.S. GAAP lens without the per­spec­tive of IFRS preparers.

However, he suggested that IFRS preparers could “provide input to the FASB staff and the FASB TRG par­tic­i­pants to the extent they believe they have important factors that should be con­sid­ered for dis­cus­sion by the FASB TRG.” He noted also that he expected SEC reg­is­trants to “monitor the TRG dis­cus­sions and meeting minutes to inform their selection and im­ple­men­ta­tion of rea­son­able policies.”

The full text of Mr Schnurr's speech is available on the SEC's Web site.

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