Over the past year, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have worked collaboratively to revise the standards businesses use to report revenue recognition. The Boards wish to align current US revenue recognition standards as closely as possible with IFRS standards so that if the two standards converge it will be a smooth transition. The goal is simple: one world-wide standard.
The Securities and Exchange Commission, which governs U.S. financial reporting requirements, will determine what is required for U.S. companies. In preparation for the SEC's upcoming decision, the two boards are combining their revenue recognition standards so outcomes will be essentially the same no matter which reporting standards (IFRS or US GAAP) the SEC chooses.