A certain number of application problems are not addressed in the discussion paper and the consequences of the new proposal are not clear, CESR notes and calls on the IASB to come forward with a new paper.
CESR supports the objective of providing a single principle for recognising revenue but underlines that a certain number of application problems are not addressed in the discussion paper and the consequences of the new proposal are not clear.
CESR has doubts whether the development of a set of principles capable of universal application is possible at the moment.
CESR notes that the IASB is seriously considering scope exemptions for financial instruments, insurance contracts, and leasing contracts. Also, many of the issues brought to IFRIC’s attention are not addressed.
CESR is also concerned that the scope of the current project seems only to address a limited number of the application issues.
CESR notes that due to the lack of detail in definitions on key elements, such as control and revenue, the current proposal is not refined enough to ensure its consistent application in areas such as long-term contracts.
The IASB could improve the existing standards and provide additional guidance in the many areas where application problems have been identified, CESR notes.
In order to develop a new unique principle that would take into account all those situations more time is needed, the Committee says and calls on the IASB to come forward with a new discussion paper.
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© CESR - Committee of European Securities Regulators
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