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January 23, 2012

Study finds low support for revenue recognition changes

A Grant Thornton International survey found that as little as 37% of global businesses support replacing and amending existing revenue recognition standards.

The study found only 35% of respondents were aware of proposed changes to revenue recognition standard.

Almost two thirds of respondents thought the latest joint proposals by the US Financial Accounting Standards Board and the International Accounting Standards Board on revenue recognition would lead to increased costs and more complexity.  

Support for standard change was highest in India (59%), the ASEAN countries (56%) and Latin America (48%).

In the US, 72% believe the proposal will lead to increased complexity while this drops to 44% in the UK.

Grant Thornton International chief executive Ed Nusbaum said revenue is a key performance measure for every business and a single accounting standard in this area is critical.

“We believe that the IASB and FASB are moving in the right direction and we’re pleased they’re moving together,” he said. “The boards have been doing a great job of engaging with their constituents in their outreach, and the results are evident in the proposals. The decision to re-expose is also very positive.”

The IASB and FASB re-exposed the revenue recognition proposal in November 2011 and the proposal is open for comment until 13 March 2012.

Grant Thornton international surveyed 2,800 businesses in 40 countries in December.

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