The International Accounting Standards Board (the Board) has during the January 2016 Board meeting completed the decision-taking related to the clarifications to its Revenue Standard, IFRS 15 Revenue from Contracts with Customers.
The Board published for public comment proposed targeted amendments to IFRS 15 in July 2015. The Board discussed feedback on the consultation at its December 2015 meeting and has now given IASB Staff the green light to draft the final amendments. The clarifications to the Revenue Standard are expected to be published in March 2016.
The effective date of the amendments will be 1 January 2018, the same date as the Revenue Standard becomes effective.
Update on the TRG
When the IASB and the US Financial Accounting Standards Board (FASB) jointly issued the Revenue Standard in May 2014, they also set up a Transition Resource Group (TRG) to support implementation of the Standard.
The TRG has met six times since July 2014 and has been useful in supporting implementation of IFRS 15. However, it should be emphasised that the TRG does not publish authoritative guidance; this comes from the Board only. Most of the topics discussed have not resulted in any standard-setting action. However, a few issues required the Board’s consideration and some of these resulted in clarifications to the Standard.
The Board is now of the view that stakeholders need to know that they can continue their implementation process with the confidence that IFRS 15 will not be subject to further changes. Accordingly, the Board does not plan to schedule further meetings of the IFRS constituents of the TRG. However, the TRG will not be disbanded and will be available for consultation by the Board if needed. In addition, there is still scope for IFRS stakeholders to submit issues through the website.
The IASB will continue to collaborate with the FASB. It will also monitor any discussions that the FASB may have in the future with the US GAAP constituents of the TRG. However, companies reporting using IFRS Standards are not required to consider the pronouncements or public discussions of the FASB in applying IFRS Standards.
The hierarchy in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors explains that in the absence of specific requirements in IFRS Standards, companies may consider the most recent pronouncements of other standard-setting bodies, other accounting literature and accepted industry practices, but only to the extent that these do not conflict with IFRS Standards and the Conceptual Framework.
The IASB and the IFRS Foundation will also support implementation of the Standard through its education initiative, conferences, etc. If a significant, pervasive issue were to arise, the Board would consider whether a public discussion would be helpful to assist practice.