Navigating the New Revenue Standard
The new revenue recognition standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance.
On May 28, 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued their final standard on revenue from contracts with customers. The standard, issued as Accounting Standards Update 2014-09 (and codified as Topic 606 in the FASB Accounting Standards Codification) by the FASB and as IFRS 15 by the IASB, outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition standard (including industry-specific guidance in U.S. GAAP).
The Institute of Chartered Accountants of India (ICAI) has recently issued an Exposure Draft (ED) of the proposed Indian Accounting Standard (Ind AS) 115, Revenue from Contracts with Customers i.e. the proposed IFRS Converged accounting standard for Indian entities, which is similar to IFRS 15.
The new standard’s disclosure requirements are significantly more comprehensive than those in existing revenue standards.