A few bytes away from downloading the converged revenue recognition standard
Given the number of US technology companies with operations centres in Ireland, the new joint revenue recognition standard proposed by the IASB and FASB will have a material effect on the way US technology companies account for revenue.
Although the effective date of the exposure draft is subject to change, certain entities that are currently within the scope of ASC 985-605 (SOP 97-2) may be required to start applying the new guidance as soon as fiscal years beginning on or after January 1, 2015.
Thus, because of the currently proposed requirement to retrospectively adopt the revised ED, certain entities may be required to apply the guidance to transactions as early as January 1, 2013.
Commenting the exposure draft, Richard Howard, partner in Deloitte’s Technology Media and Telecommunications group, said that the elimination of vendor specific objective evidence (VSOE) in favour of a fair value measure will give a more appropriate view of company revenue, adding that VSOE had led to an overly conservative accounting environment, and that the new standard will require a greater level of judgement.
Deloitte have produced this document to help technology companies understand how the specifics of the standard may affect them upon implementation.