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June 10 — FASB isn't considering another deferral of the effective date of forthcoming revenue recognition standards, a FASB member says.
“I can assure you that there is no such talk occurring in Norwalk,” FASB's headquarters, FASB member Thomas Linsmeier said June 9 at a USC financial reporting conference in Los Angeles. Linsmeier was referring to rumors that originated on the West Coast.
The far-reaching standards, issued by FASB and the International Standards Board in 2014, go into effect for public companies in 2018. In 2015, the boards deferred the original 2017 effective date by one year (11 APPR 694, 7/31/15), (11 APPR 17, 8/14/15).
The standards will affect many thousands of commercial enterprises around the world. They present new control-based principles for accounting for revenue from customer contracts. They also require much new information in footnote disclosures.
Linsmeier, who spoke at an annual financial reporting conference of the University of Southern California, suggested that valid reasons for further delay in implementing the revenue rules don't exist.
“We indicated at the time that we deferred the effective date of the guidance by one year that, absent truly extraordinary circumstances, no further deferrals of the effective date should be expected,” he said.
“We have not changed that view,” said Linsmeier, who leaves FASB June 30, because of term limits.
Meanwhile, accountants in rulemaking circles are talking more about widespread lack of preparation for the shift to the new rules.
They say that companies aren't doing the appropriate groundwork to get set for applying the revenue standards—despite advisories to get started from regulators, standard-setters, auditors and financial executives last year and in 2016 (11 APPR 1064, 11/20/15).
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