In a press release issued today, the FASB and IASB announced their decision to re-expose the revenue recognition proposal. In their own words:

It was the unanimous view of the boards that while there was no formal due process requirement to re-expose the proposals it was appropriate to go beyond established due process given the importance of the revenue number to all companies and the need to take all possible steps to avoid unintended consequences.

The boards intend to re-expose their work in the third quarter with a 120 day comment period, which means that it is very unlikely that a final standard will be issued by December 2011, the most recently revised goal as of an April 21, 2011 press release.

I’m not sure how to react to this announcement. While I applaud the boards for their carefulness in seeking public comment on their work, I’m not sure what decisions need additional input. As some of my academic and practice colleagues have quipped lately, this new standard is turning out to be nothing more than all the old standards in new drag. Indeed, many of them have commented that although the proposed standard talks about things a little bit differently, almost all of the revenue recognition outcomes are the same.

I’m not sure I agree with my colleagues, but I can see their point. Perhaps in re-exposing their recent work, the boards should create a supplementary document that separately lists all of the outcomes that would actually be different from current practice, and what aspect(s) of the new model made that outcome different. I wonder how long that document would turn out to be.

One additional comment: My thoughts above about the outcomes of the new proposal not really being all that different from what we had before pertains mostly to US GAAP, but not to IFRS. Given the dearth of guidance on multiple elements (IAS 18, par. 13), I think the new proposal clearly improves existing IFRS. So, my comments above are largely focused on the changes (or lack thereof) to the outcomes in US GAAP.