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Staying on top of standard-setting initiatives


Vol. 12-04
February 3, 2012

 

Revenue from Contracts with Customers: The Revised Exposure Draft Contains More Detailed Guidance Than Existing IFRSs

Comments, on the form provided, are requested by March 13, 2012.

The Accounting Standards Board (AcSB) proposes, subject to comments received following exposure, to incorporate into Part I of the CICA Handbook – Accounting a new standard, “Revenue from Contracts with Customers.”

The International Accounting Standards Board (IASB) recently issued an Exposure Draft, “Revenue from Contracts with Customers”. The IASB intends to replace IAS 11 Construction Contracts and IAS 18 Revenue with a new IFRS.

Applying the proposals in the Exposure Draft would improve the comparability of reported revenue for entities in many industries.

The timing of revenue recognized from contracts with a number of discrete performance obligations (multiple-element arrangements) and long-term construction contracts may change from current practice. The criteria for identifying performance obligations differ from those used to identify separate elements in existing standards, but the proposals would result in the treatment of construction projects as a single performance obligation satisfied over the construction period.

Unlike the 2010 proposal, the amount of revenue recognized would not be adjusted for any expected credit losses; credit losses would be deducted from revenue on a separate line directly below revenue.

Accounting for warranties is not expected to change from current practices.

The proposed standard would require an entity to evaluate whether the costs to complete a performance obligation that is to be satisfied over time exceed the remaining revenue expected and recognize a loss when such a contract becomes onerous.

Many entities would be required to provide more extensive disclosures than required by existing standards and the proposed standard prescribes interim as well as annual disclosures.

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Read our summary: IASB issues revised exposure draft on revenue recognition

This Week in Review

Standard-setting Activities Digest
The Standard-setting Activities Digest (the Digest), published on a monthly basis not only represents an excellent starting point towards the original published text of the standard-setting organization but also present a single source of reference for current standards, future standards, exposure drafts and projects. You may register here to receive automatically a publication alert in your email. The following items have been released this week and will be included in the next edition of the Digest:
 
Canada
AcSB Activities

Revenue from Contracts with Customers
The AcSB has issued an Exposure Draft that corresponds to the IASB's Exposure Draft on this topic.

Read our summary: IASB issues revised exposure draft on revenue recognition

Press review
(EXTERNAL WEB SITE LINKS - Some sites may require free registration)
Date Publication Article
2012/02/05 World Economic Forum Global Risks 2012 - Seventh Edition
2012/02/03 The D & O Diary Canadian Securities Class Action Lawsuit Filings Hit Record in 2011

Download the report:: Trends in Canadian Securities Class Actions: 2011 Update (NERA Economic Consulting)
2012/02/03 Deloitte US Accounting Roundup (January 2012)
2012/02/02 CPA2Biz The New Qualitative Assessments in Goodwill Impairment Testing May Not Be Simple
2012/02/02 Deloitte US Why Brand Stewardship is a CFO's Job, A CFO Insights newsletter
2012/02/01 The Conference Board Governance Center Blog Boards Beware of Growing Executive Compensation Packages
2012/02/01 CFO.com SEC Advised to Dial Back "Facebook Rule" for Small Cos.
2012/01/27 Accounting Today FASB, IASB Hone Differences in Financial Instruments Standards
2012/01/18 Government of Canada Recommendations Report - Cutting Red Tape Freeing Business to Grow
2012/01/09 Harvard Business School Earnings Management from the Bottom Up: An Analysis of Managerial Incentives Below the CEO
2012/01/04 Prime Journals of Business Administration and Management

Corporate governance in Islamic financial institutions: An ethical perspective (PDF)
2012/01/03 Dorsey & Whitney LLP Going Dark “ The Simple Path to Exiting the U.S. Public Company Reporting System “ Delisting and Deregistration under the U.S. Securities Exchange Act of 1934 (PDF)
2012/01 Deloitte US Risk Committee Resource Guide for Boards (PDF)


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