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TRG Snapshot — Summary of revenue implementation issues discussed to date

Published on: Mar 31, 2016

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Introduction

Since the May 2014 release of the FASB’s and IASB’s new revenue standard — issued by the FASB as ASU 2014-091 (codified primarily in ASC 6062) and by the IASB as IFRS 153 — the boards have been working to identify issues related to the standard’s implementation. The boards’ joint revenue transition resource group (TRG) has been an integral part of this process. As noted on the FASB’s Web site, the TRG comprises financial statement preparers, auditors, and users from “a wide spectrum of industries, geographical locations and public and private organizations,” and board members of the FASB and IASB have attended the TRG’s meetings. In addition, representatives from the SEC, PCAOB, IOSCO,4 and AICPA are invited to observe the meetings.

The TRG does not issue guidance but was formed instead to provide feedback on the standard’s implementation and has played an important role in addressing issues raised by stakeholders. In its six meetings held thus far, the TRG has addressed nearly 40 implementation issues. By analyzing and discussing potential implementation issues, the TRG has helped the boards determine whether they need to take additional action, such as providing clarification or issuing other guidance.

On January 21, 2016, the IASB issued an announcement that it has completed its decision-making process related to clarifying the new revenue standard and that the IASB does not plan to schedule any more TRG meetings for IFRS constituents. However, the FASB will continue to address implementation issues and has scheduled three TRG meetings for 2016. Offering its support for the TRG’s mission, the SEC staff recently commented5 on the implementation of the new revenue standard, which included the following key points on the TRG:

  • The TRG’s objective of soliciting, analyzing, and publicly discussing stakeholder implementation issues remains relevant (i.e., as a mechanism to promote more consistent application of the new revenue standard).
  • While the IASB will no longer attend TRG meetings, TRG meeting participants should be prepared to view matters from a global perspective.
  • The SEC staff attends TRG meetings and will use the discussions as a basis for assessing the appropriateness of domestic and foreign registrants’ revenue recognition policies. Registrants should therefore monitor and consider TRG discussions and meeting minutes (which are available on the standard setters’ Web sites) in the development of reasonable revenue recognition accounting policies.
  • The SEC staff strongly encourages domestic and foreign filers to consult with the OCA if they anticipate selecting an accounting policy that is inconsistent with TRG discussions (i.e., in which general agreement was reached and documented in meeting minutes).

This TRG Snapshot summarizes issues discussed by the TRG to date, which are organized topically in a manner consistent with their arrangement in the new revenue standard. The accompanying appendix lists the issues chronologically and includes links to additional information.

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1 FASB Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers.

2 For titles of FASB Accounting Standards Codification (ASC or the “Codification”) references, see Deloitte’s “Titles of Topics and Subtopics in the FASB Accounting Standards Codification.”

3 IFRS 15, Revenue From Contracts With Customers.

4 International Organization of Securities Commissions.

5 Wesley Bricker, deputy chief accountant in the SEC’s Office of the Chief Accountant (OCA), spoke about the implementation of the new revenue standard at the 43rd Annual Securities Regulation Institute (sponsored by the Northwestern Pritzker School of Law).

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