A Joint Transition Resource Group Formed by FASB and IASB for Revenue Recognition
The creation of a joint transition resource group has finally been announced by the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB). This transition group will keep IASB and FASB informed about the issues occurring during the implementation of standards. This group will assist them what action should be taken to resolve the diversity in practice.
The IASB was established in 2001 for the development in public interest, a single set of high quality, global accounting standards that provide high quality, transparent and in general purpose financial statements. The financial Accounting standards Board has been developed in the private sector for establishing standards of financial accounting and reporting since 1973.
10 to 15 specialists will be selected for the transition group which will be announced shortly after the approval of revenue standards. These specialists include financial statements preparers, auditors, regulators, users and other stakeholders. IASB and FASB members will also be a part of these specialists.
It is expected that IASB and FASB may organize other transition groups to make the way of accountants easy and make their memorandum of understanding such as leasing and financial instruments.
The purpose of this transition group is that the companies would understand what is expected of them until the final document is issued and it becomes effective.
IASB chairman Hans said: “Revenue is a key performance indicator and is important to every business”. Another factor is that IASB will be on recess for the month of august. The presentation of IASB and FASB staff will be based on how to move away from industry specific guidance across multiple industries. Stakeholders will submit implementation issues to the transition group. The revenue recognition standard is issued later this year.
When the final standard will be issued, guidelines for submitting issues will be posted to the boards. It is expected that the group may have a limited existence, and its activities are expected to take place before the standards are effective in 2017.