FASB Rejects Separate Revenue Recognition Transition Options for Nonpublic Entities

Published on: 13 Jul 2011

Today, the FASB considered providing nonpublic entities with separate transition relief for when they adopt the final revenue standard. However, the Board ultimately decided that public and nonpublic entities will have the same transition requirements (see Deloitte’s June 15, 2011, journal entry for a summary of the requirements). In reaching this decision, the Board noted that (1) under U.S. GAAP, nonpublic entities are not required to present multiyear financial statements (allowing such entities to potentially avoid some of the complexity of applying the transition guidance to multiple periods) and (2) for nonpublic entities that do provide multiyear financial statements, allowing noncomparable results would be inconsistent with current U.S. GAAP. The FASB further noted that it will be discussing, jointly with the IASB next week, the effective date of the final standard for public entities. It will consider whether to allow further deferral for nonpublic entities at a future date.

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