IASB/FASB Joint Discussions: Revenue Recognition

Date recorded:

Both IASB and FASB have added to their agenda projects on revenue recognition, and both have indicated an interest in pursuing the projects as a joint project. The Boards discussed the issues relating to pursuing the project jointly, including:

  • The Boards' agendas.
  • Joint project working group.
  • Joint project staff.
  • Joint project plan.
  • Milestones and deadlines.
  • Anticipated final products.
The project would address terminology, criteria for revenue recognition, and deficiencies in the existing criteria. The Boards discussed two approaches to revenue recognition:
  • Realisation and 'completion-of-earning-process' approach (set out in revenue recognition concepts the conceptual frameworks of both Boards).
  • Asset and liability approach (set out in the definitions of assets and liabilities in both frameworks). Revenue would be defined in terms of changes in assets and liabilities.
The staff of both Boards recommend the asset and liability approach. The project will include recognition of gains as well as revenue.

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