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Chief Accountant of the SEC comments on revenue recognition

  • SEC speech (dk gray) Image

24 Mar 2016

At an accounting and reporting congress in Philadelphia, Jim Schnurr, Chief Accountant of the US Securities and Exchange Commission (SEC), shared some of his thoughts and perspectives on the continuing transition activities for the new revenue standard.

One of the aspects Mr Schnurr elaborated on was the status of the revenue transition resource group (TRG) formed jointly by the IASB and the FASB to keep the standard-setters informed on interpretive issues occurring during implementation of the converged revenue recognition standard and to assist in determining what action may be needed to resolve diversity in practice.

In January this year, the IASB announced that it will no longer attend TRG meetings and stated: "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.

On this development, Mr Schnurr commented:

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.

He even went as far as suggesting 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". At a minimum, he noted, he expected SEC registrants to monitor the TRG discussions and meeting minutes to inform their selection and implementation of reasonable policies.

Please click to access the full text of Mr Schnurr's speech on the SEC website.

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