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Press Release

NYSSCPA Recommends Revisions to Proposed Revenue Recognition ASU

Lois Whitehead, Public Relations Manager
Published Date:
Mar 28, 2012

New York, NY, March 28, 2012 – The New York State Society of Certified Public Accountants (NYSSCPA) has recommended revisions in its response to a proposed revenue recognition accounting standards update released by the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB).

In a comment letter issued to the FASB and IASB on March 7, the NYSSCPA stated that while it agreed with the focus of Proposed Accounting Standards Update (Revised) – Revenue Recognition (Topic 605), questions with respect to the time frame related to measuring loss or revenue and burdensome reporting requirements still need to be addressed.
The proposal is aimed at providing a more complete framework for addressing revenue recognition issues and removing inconsistencies from existing accounting practice requirements. The proposal would guide entities to recognize revenue from contracts with customers when it transfers the goods or services to the customer.
This proposal is a revision of an exposure draft that was released in 2010 and includes added guidance on how to determine when a good or service is transferred over time and a simplification of the proposals on warranties.
The NYSSCPA recommends the removal of the one-year threshold for measuring performance obligations that could allow an entity to reach different conclusions about nearly identical situations.
“It didn’t seem to be in the spirit of what FASB is proposing,” NYSSCPA Financial Accounting Standards Committee Member Sharon Sabba Fierstein said of the one-year time frame that goes against the trend of FASB to avoid bright lines with this proposal.
The additional quarterly reporting disclosures of contract assets and liabilities required in the proposal would also substantially increase both the costs to prepare and review financial statements. The NYSSCPA recommends a disclosure that incorporates high-level, qualitative discussion and highlights the nature and amount of significant change in contracts.
The NYSSCPA does agree with the proposed guidance governing constraints on the cumulative amount of revenue that an entity would recognize for satisfied performance obligations related to what the entity is reasonably assured to be entitled to.
“We recognized that the FASB has been responsive to previous comments from the public,” Fierstein said of FASB. “Overall we were supportive of the direction that the Board is taking.”
The comment period for the proposal closed on March 13. If enacted, the proposal would take effect for annual reporting periods beginning on or after January 1, 2015.
About the NYSSCPA 
Representing more than 28,000 CPAs, the NYSSCPA was the first state accounting organization in the nation. Incorporated in 1897, the Society is a not-for-profit organization that seeks to establish and maintain high standards of integrity, honor, and character among certified public accountants.
The New York State Society of CPAs is located at 3 Park Avenue in New York City. To learn more about the Society call 800-633-6320 or visit the Society’s website at