World Watch _ FASB IASB convergence under pressure_ PwC

World Watch _ FASB IASB convergence under pressure_ PwC -...

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Global Convergence under pressure as IASB and FASB discuss potential revisions to revenue standard 13 Apr 2015 The IASB and FASB were aligned on the need to address feedback on licences and performance obligations, but not the how. Dave Morgan, US ACS, looks at the deliberations. Convergence between IFRS and US GAAP seems merely a blip in the history of standard setting. The joint revenue standard issued just under a year ago is under discussion again as the IASB and FASB look at implementation issues raised by stakeholders and discussed by the Transition Resource Group (TRG). The boards discussed licences and performance obligations during their February joint board meetings. Both the IASB and FASB supported their own staff’s recommendations, but the proposals were different. The IASB decided to simply clarify the principle related to licences, whereas the FASB agreed to amend it. The FASB intends to make other changes to the guidance on licenses and identifying performance obligations. The IASB will instead explore adding more examples and provide other education materials. The boards did not discuss the ongoing outreach on the effective date. The FASB is expected to report on a potential extension to the 2017 effective date in Q2 2015. The IASB has not provided a specific timeline. The European Financial Reporting Advisory Group (EFRAG) board recently confirmed that it intends to endorse the new revenue standard with no change to the effective date. Licence of intellectual property The FASB and IASB discussed four implementation matters related to licences. Nature of the promise Stakeholders have asked how to determine when an entity’s activities significantly affect the intellectual property (IP). In particular, which attribute of the IP (that is, form, functionality, value
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