The new standard on revenue recognition was the product of a long joint development effort by the Financial Accounting Standards Board and the International Accounting Standards Board. The standard is principles-based and provides a sound model and objective. Differences between the versions issued by the two boards are largely inconsequential. After working with the new standard and serving on the FASB/IASB Joint Transition Resource Group for Revenue Recognition (TRG), my initial support for the standard has only grown stronger.
FASB and IASB correctly realized that a broad, principles-based standard covering such an important area of financial reporting would need more than the normal amount of time to implement. The TRG was formed to discuss implementation questions, identify areas where more guidance might be helpful and, importantly, to increase the chance that the converged standard actually leads to converged and consistent accounting. While the implementation efforts are moving along well, the planned responses to certain implementation issues provide a case study in the different ways we handle things in the United States compared to those abroad.
