Question

FASB and IASB recently delayed the effective date of their revenue standard.

1. What new information is available regarding FASB's and/or IASB's progress toward addressing the underlying reason that prompted the delay?

2.How prevalent is sustainability reporting in (a) the U.S. and (b) globally? In citing specific statistics, indicate the size of the company to which the information pertains.

3. What standards or guidelines should accounting professionals involved in sustainability reporting be familiar with?

Answer 1

Citing challenges for financial statement preparers, FASB voted to delay the effective date of the new revenue recognition standard by one year, with early adoption permitted as of the original effective date. The original effective date was 1st Jan 2017 for public entities following calendar year and 1st Jan 2018 for private entities. The delay keeps IASB’s effective date in line with that of FASB, which also voted in favor of a one-year deferral earlier this month.

The new effective date of IFRS 15, Revenue from Contracts with Customers, is Jan 1, 2018.

Preparers applying IFRS continue to have the option to apply the standard early; preparers using U.S. GAAP are permitted to apply the new standard early on the original effective date. The IASB plans to publish the formal amendment specifying the new effective date in September.

The standard is the result of many years of collaboration between FASB and the IASB in an effort to produce consistency in financial reporting of a critical metric across jurisdictions and sectors. The IASB and FASB issued the standard jointly in May 2014, several months later than expected. Since then, some financial statement preparers have complained that the original effective date did not give them enough time to implement the standard

The boards also are proposing clarifications to the standard that preparers will need to consider. FASB has issued two proposed Accounting Standards Updates related to the standard and plans to propose other changes. The IASB plans to propose some clarifications to the standard later this month.

These proposed changes came about as a result of the boards’ joint transition group, which evaluated feedback from preparers on implementation challenges and referred some issues to the boards for possible additional standard setting.

“The deferral will give companies more time to implement the standard in view of the clarifications that we will propose shortly,” IASB Chairman Hans Hoogervorst said in a news release. “It also keeps the effective date aligned for IFRS and U.S. GAAP.

A sustainability report is a report published by a company or organization about the economic, environmental and social impacts caused by its everyday activities. A sustainability report also presents the organization's values and governance model, and demonstrates the link between its strategy and its commitment to a sustainable global economy.

Sustainability reporting can help organizations to measure, understand and communicate their economic, environmental, social and governance performance, and then set goals, and manage change more effectively. A sustainability report is the key platform for communicating sustainability performance and impacts – whether positive or negative.

Sustainability reports are released by companies and organizations of all types, sizes and sectors, from every corner of the world.

Companies like Deloitte, Coca-Cola Company has a longstanding commitment to reporting on Sustainability reports.

Thousands of companies across all sectors have published reports that reference GRI’s Sustainability Reporting Guidelines. Public authorities and non-profits are also big reporters. GRI’s Sustainability Disclosure Database features all known GRI-based reports.

Major providers of sustainability reporting guidance include:

• GRI (GRI's Sustainability Reporting Standards)
• The Organisation for Economic Co-operation and Development (OECD Guidelines for Multinational Enterprises)
• The United Nations Global Compact (the Communication on Progress)
• The International Organization for Standardization (ISO 26000, International Standard for social responsibility).