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Förslag till ny standard om intäktsredovisning


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Sigvard Heurlin, PwC.

IASB och FASB arbetar sedan några år med att ersätta gällande standarder för intäktsredovisning, IAS 11 och IAS 18, med en ny generell standard för redovisning av intäkter avseende kontrakt med kunder. Ett förslag till standard (Exposure draft) kom ut i juni 2010 och standarden beräknas bli publicerad i kvartal 2, 2011. Huvudprincipen i förslaget är att intäkt ska redovisas när vara eller tjänst överförts till kunden och kunden fått kontroll över varan eller tjänsten. Ca 1.000 kommentarer har lämnats till förslaget, de flesta från företag och organisationer i USA. Under detta avsnitt i symposiet ges en överblick över innehållet i den nya standarden. Vidare summeras den diskussion som IASB och FASB har haft om de mest kontroversiella punkterna i förslaget och vilka väsentliga förändringar som sker i förhållande till gällande standarder. Exempel på punkter som tas upp:

Vilka intäkter omfattas och när ska intäkt redovisas för vara resp. tjänst?
Hur redovisas intäkt när ett kontrakt omfattar flera uppdrag eller tjänster?
Hur definieras det centrala begreppet 'fullgörandeförpliktelse' (Satisfaction of a performance obligation) ?
Hur redovisas kostnader för att erhålla ett kontrakt? Vad gäller för produktgarantier?
Vad innebär standarden för successiv vinstavräkning?

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Förslag till ny standard om intäktsredovisning

  1. 1. SymposiumRevenue from Contractswith Customers27 September 2011Sigvard Heurlin
  2. 2. AgendaWhy have the IASB and the FASB taken on this project?What is the principal approach taken? And what has been achievedduring the last year?Where do the IASB and the FASB stand now in this project?What happens next?Revenue Recognition September 2011PwC Slide 2
  3. 3. Why need for a new standard?A critical project for both the IASB and the FASB - For the IASB: Existing standards on revenue recognition, IAS 11 and IAS 18, are based on two different principles - Insufficient guidance in some cases. E.g. multiple elements arrangements. Reliance on US GAAP for specific guidance - For the FASB: US GAAP has a wide range of very detailed industry specific requirements (about 200), but no single standard - A need for consistent principles for use across industries.Revenue Recognition September 2011PwC Slide 3
  4. 4. What is the principal approach taken?Employs an assets and liabilities approach - the cornerstone of the IASBand the FASB FrameworkCurrent revenue guidance in IFRS and US GAAP focuses on an´earnings process´However, difficulties often arise in determining when an entity earnsrevenue.The earnings process is therefore not referred to in the proposal.Revenue Recognition September 2011PwC Slide 4
  5. 5. Where do the IASB and the FASB stand in theproject? ED, Revenue from contracts with customers, published in June 2010 Nearly 1.000 comment letters received Redeliberations of the proposal in the ED started in January 2011 A new ED to be published in Q3 with a 120-day comment period, will probably be delayed until October Goal: to issue a final standard in 2012.The following slides present the revenue model that theBoards have developed after recent decisions.The decisions are tentative and subject to change.Revenue Recognition September 2011PwC Slide 5
  6. 6. Significant feedback on the 2010 EDOverall views:• Support for a converged revenue recognition model• However, a need for further clarification of the operations of the proposed principles: - the concept of control to service contracts and contracts for continuous transfer of control, - distinct goods or services for identifying separate performance obligations, - estimating the transaction price on a probability-weighted basis and including credit risk and time value of money calc., - cost-benefit considerations.• Re-expose for further public comments.Revenue Recognition September 2011PwC Slide 6
  7. 7. The scope Does not seem to imply any changes to the scope. Thus the proposed scope would refer to all contracts with customers, except:  Lease contracts,  Insurance contracts,  Certain contractual rights and obligations within the scope of other standards, including financial instruments.Revenue Recognition September 2011PwC Slide 7
  8. 8. The basic model is unchanged from the 2010 EDThus the application of the revenue recognition model includes thefollowing steps:1. Identify the contracts with the customer(s)2. Identify the separate performance obligations ( ´prestationsförpliktelser´)3. Determine the transaction price4. Allocate the transaction price to the performance obligations5. Recognise revenue when a performance obligation is satisfied.Revenue Recognition September 2011PwC Slide 8
  9. 9. Summary of the Revenue recognition model: Step1: Identify the contract(s) with the customerProposal in the ED Revised modelDefinition of a contract:An agreement between two or No change.more parties that creates No change to the criteria for theenforceable rights and obligations existence of a contract (e.g. should have commercial substance, approval by the parties, identification by the entity of the enforcable rights and manner of payment).Revenue Recognition September 2011PwC Slide 9
  10. 10. Summary of the Revenue recognition model: Step1: Identify the contract(s) with the customerProposal in the ED Revised modelCombining contracts:Account for contracts together if Combine contracts with the samethe contract prices are customer if entered into at or nearinterdependant. the same time.Indicators to be applied. Criteria to be applied: • Negotiated as a package • Consideration in one contract depends on the the other contract • Interrelated in terms of design, technology or function.Revenue Recognition September 2011PwC Slide 10
  11. 11. Summary of the Revenue recognition model. Step1: Identify the contrac(s)Proposal in the ED Revised modelSegmenting a contract:Account for a single contract as (This step is eliminated. However,two or more if goods or services price independence used whenare priced independently. allocating the transaction price.)Revenue Recognition September 2011PwC Slide 11
  12. 12. Summary of the Revenue recognition model. Step2: Identify the separate performance obligationsProposal in the ED Revised modelDefinition of a performanceobligation:An enforceable promise No material change. Includes(´tvingande löfte´) to transfer a promises that are implied by:good or service. • business practices • published policies • specific statements if valid expectations (´välgrundade förväntningar´) to perform are created.Revenue Recognition September 2011PwC Slide 12
  13. 13. Summary of the Revenue recognition model:Identify the separate performance obligationProposal in the ED Revised modelThe separate performanceobligation identifiedAccounted for separately only if In some cases the risks to thedistinct (´tydligt urskiljbar´): entity of providing goods/services• if sold separately by the entity or are inseparable: single another entity; or performance obligation.• if a distinct function and a In all other cases a separate distinct profit margin. performance obligation if • a good/service is distinct; and • the pattern of transfer is different from other transfers.Revenue Recognition September 2011PwC Slide 13
  14. 14. Summary of the Revenue recognition model:Identify the separate performance obligationProposal in the ED Revised modelWarranties(1) If for latent effects: not a (1) If an option to purchase a separate performance warranty separately: a obligation. A provision is separate performance recognised. obligation and allocation of(2) If for faults that arise after the revenue to the service. products are transferred to the (2) If not such option: (a) a cost customer: a separate accrual, unless (b) the performance obligation. warranty provides a service toIn both cases thus deferral of the customer (underrevenue. circumstances specified in the revised model).Revenue Recognition September 2011PwC Slide 14
  15. 15. Example: Revenue allocationCase 1. A telecom coy sells a mobile phone and unlimited calls and textsto Cust. A. The phone is free if the customer signs up for a year; thenetwork service is CU40 pm.Case 2. The coy also sells the same phone to Cust. B for CU300, with thesame service provided for at CU15 pm.At present: Case 1. Probably no revenue on the phone and revenue ofCU40 pm. Case 2. Revenue on the phone CU300 and revenue of CU15pm. Thus revenue attributed to main deliverables.Under the proposal: Revenue would be recognised at similaramounts for each phone and service based on (estimated) selling prices,see Step 4 below. Thus revenue depicts transfer to customers and isallocated to all performance obligations, not just main deliverables.Revenue Recognition September 2011PwC Slide 15
  16. 16. Summary of Revenue recognition model. Step 3:Determining the transaction priceProposal in the ED Revised modelDefinition of the transaction priceThe amount of consideration an No significant change.entity receives, or expects toreceive, in exchange fortransferring goods or services.Revenue Recognition September 2011PwC Slide 16
  17. 17. Summary of the Revenue recognition model.Determining the transaction price.Proposal in the ED Revised modelUncertain considerationThe transaction price should What is most predictive:reflect the probability-weighted • the probability weighted amountamont of the consideration. • the most likely amount.Only if the transaction price can bereasonbly expected. Allocate price to a satisfied performance obligation ´unless theConditions to be met (e.g similar entity is not reasonably assuredtypes of contracts). (´saknar rimliga garantier´) to be entitled (´ha rätt ´) to that amount´. Circumstances specified.Revenue Recognition September 2011PwC Slide 17
  18. 18. Summary of the Revenue recognition model.Determining the transaction price.Proposal in the ED Revised modelOtherReduce the amount to reflect the Do not reflect the effects of acustomer´s credit risk. customer´s credit risk. Recognise an allowance for any expected impairment loss.Adjust the promised amount toreflect the time value of money Adjust the promised amount to reflect the time value of of money, if the financing component is significant. Various factors to be considered.Revenue Recognition September 2011PwC Slide 18
  19. 19. Summary of the Revenue recognition model. Step4: Allocate the transaction price to the perf. oblig.Proposal in the ED Revised modelAn entity should allocate the No material change.transaction price to the separate If the standalone selling price isperformance obligations in highly variable, a residualproportion to the standalone technique may be used (referenceselling price (estimated if to the total transaction price lessnecessary). the less the standalone selling prices of other goods or services). Conditions to be met when the transaction price is allocated to one or more performance obligations.Revenue Recognition September 2011PwC Slide 19
  20. 20. Summary of the Revenue recognition model. Step5: Recognise revenue when a perf. obl. is satisfiedProposal in the ED Revised modelRecognise revenue when the No change to core principle.customer obtains control of the Indicators on when the customer haspromised goods or service (when obtained control of a good (e.g.the customer has the ability to physical poss., risks and rewards).direct the use of/receive the benefitfrom the good or service). Criteria on when a performanceIndicators on when control has obligation for services is satisfiedbeen obtained. over time, at least one of:(No specific guidance for • The entity´s performance createsdetermining when a performance or enhances an asset,obligation is satisfied over time). • If not, a benefit received, (a few alternative criteria to be met).Revenue Recognition September 2011PwC Slide 20
  21. 21. Summary of Revenue recognition model: ContractcostsProposal in the ED Revised modelCost of obtaining a contractAs an expense when incurred. Recognise an asset for the incremental costs of obtaining a contract that the entity expects to recover.Revenue Recognition September 2011PwC Slide 21
  22. 22. Summary of Revenue recognition model.Recognise revenue when a perf. obl. Is satisfied.Proposal in the ED Revised modelMeasuring progressA performance obligation satisfied No change.continuosly: select one method and Recognise revenue only if theapply it consistently.. entity can reasonably measure its progress toward successful completion.Revenue Recognition September 2011PwC Slide 22
  23. 23. Summary of the Revenue recognition model.A short summary• No change for many transactions• Principles-based standard to give robust application - Reduces need for interpretations - Prevent gaps being filled by local or imported ´rules´• A single, global revenue recognition framwork across all industries and all markets• Revenue attributed to all performance obligations, not just main deliverables• Use of estimates when separating obligations better reflects transfer of different deliverables.Revenue Recognition September 2011PwC Slide 23
  24. 24. What happens next?• As noted a new ED to be published in October 2011 (Q3 was intended)• Focus is on drafting as well as re-exposure of a selected number of change in the 2010 ED• Will be out for comments for 120 days• Effective date?Revenue Recognition September 2011PwC Slide 24
  25. 25. Comments?Questions?© 2011 All rights reserved. Not for further distribution without the permission of PwC."PwC" refers to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firmsof the PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide anyservices to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professionaljudgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exerciseof another member firms professional judgment or bind another member firm or PwCIL in any way.