News

Joint Transition Resource Group for Revenue Recognition debates implementation issues

The inaugural meeting of the Joint Transition Resource Group for Revenue Recognition discussed implementation issues relating to IFRS 15 Revenue from Contracts with Customers, including: gross versus net revenue presentation; royalties on licensed intellectual property; and impairment of capitalised contract costs. The discussion was intended to help the Boards understand the implementation issues arising from IFRS 15, rather than reach conclusions on the specific issues.

What you need to know:

•  At its inaugural meeting, the TRG discussed implementation issues relating to: gross versus net revenue presentation; royalties on licensed intellectual property; and impairment of capitalised contract costs.
• The Boards intend to use the TRG’s discussions to determine whether additional application guidance or interpretation is needed for entities to apply IFRS 15 consistently. The TRG did not take any votes or summarise its views.
• The Boards plan to provide a status update on issues the TRG discussed on or before the TRG’s next meeting on 31 October 2014.

Overview

At its inaugural meeting, the Joint Transition Resource Group for Revenue Recognition (TRG) discussed four implementation issues that stakeholders have raised regarding the joint revenue recognition standard the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) (collectively, the Boards) issued recently, IFRS 15 Revenue from Contracts with Customers.

The Boards created the TRG to help them determine whether more application guidance or interpretation is needed. The TRG will not make formal recommendations to the Boards or issue any application guidance. Instead, the TRG will discuss the issues and highlight the challenges, and the Boards will determine the actions to be taken on each issue. A replay of the meeting is available on the IASB’s and FASB’s websites, and minutes will be made available in the future.

Members of the TRG include financial statement preparers, auditors and users from a variety of industries, countries and entities. Members of the Boards and observers from the International Organisation of Securities Commissions, US Public Company Accounting Oversight Board and US Securities and Exchange Commission also attended the meeting.

You can find the outcome of the Joint Transition Resource Group for Revenue Recognition here.