The boards considered the nature of the due process document on revenue recognition that is planned for publication next year.
Over the past four years, the boards have been developing an asset and liability model for revenue recognition. In this model, revenue is viewed as a function of changes in assets and liabilities, consistent with the existing definition of revenue, and not overridden by tests based on the notions of realisation and the completion of an earnings process. Furthermore, the boards have narrowed the possible implementation of the asset and liability model to two broad models. In one (the fair value model) the performance obligations are initially measured at fair value, and in the other (the customer consideration model) they are initially measured by allocating the customer consideration amount.
The boards decided that the due process document should explain, illustrate and compare these models. They also decided that the staff (in consultation with board members) should develop the models before bringing them to the boards for evaluation, discussion and possible additional development.