Although, for the most part, we do not disagree with the material set out in the discussion paper, most of the fundamental issues (in particular, to use old terminology, the approach to multiple element arrangements and the distinction between goods and services) will need to be addressed at the next stage of the project. The decisions made at that stage will be critical to the development of a Standard, and, accordingly, it is only at that stage that we will be able to assess whether we support the approach being taken by the boards; at this point, it is too soon to tell.

We support the overall objective of creating a single revenue recognition principle, though we acknowledge that there are significant challenges to such an approach. We would, however, emphasise the importance that we attach to a robust and coherent Standard on revenue recognition. This is a very important aspect of financial reporting, with many challenging issues, and it is essential that a Standard strikes the right balance between, on the one hand, being too high-level (which could create a significant level of diversity in practice for otherwise similar arrangements) and, on the other hand, being too rules-based. With that in mind, we think it is essential that a Standard sets out broad and clear principles, expressed in language that is meaningful to users, which are then reflected in practical guidance for goods, services, and other areas as appropriate. Much work has been done to address difficult revenue recognition issues over the years, both in IFRSs and in other GAAPs. Although those solutions have been developed piecemeal, and they may not all be compatible, many of the underlying principles have proven resilient and helpful. Accordingly, we urge the boards to consider the best of that existing material when moving to the next stage of the project, with the aim of preserving the best aspects of existing GAAPs to the extent that those aspects are compatible with the DP's proposals.