The discussion paper Preliminary Views on Revenue Recognition in Contracts with Customers proposes that revenue recognition should be based on a single asset or liability � an entity�s contract with a customer. The combination of the remaining rights and obligations in that contract gives rise to a (net) contract asset or a (net) contract liability.
At this meeting, the Board decided tentatively:
- to affirm the preliminary view expressed in the discussion paper that the unit of account is the remaining rights and obligations in the contract with the customer and that the contract position is presented net in the statement of financial position.
- to make no exceptions to that preliminary view for contracts requiring specific performance.
(a) net contract assets separately from net contract liabilities,
(b) short-term contract assets separately from long-term contract assets,
(c) short-term contract liabilities separately from long-term contract liabilities
The Board also discussed this project at its joint meeting with the FASB.