The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) have proposed several new accounting standards in line with the goal of converging U.S. and international accounting rules. The boards believe that U.S. generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) can be improved by developing one global standard on revenue recognition. U.S. GAAP comprises broad revenue recognition concepts and numerous requirements for particular industries or transactions, which can result in different treatment of economically similar transactions. IFRS has fewer requirements on revenue recognition, but can be difficult to understand and apply.
Accordingly, the boards issued Proposed ASU 1820-100, Revenue From Contracts With Customers, in June 2010 to improve U.S. GAAP and IFRS by:
The exposure draft was open for public comment until October 2010, and approximately 1,000 comment letters were received by the boards.
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