IASB, FASB to release joint proposal on revenue recognition.

The International Accounting Standards Board and the Financial Accounting Standards Board have proposed a joint approach for the recognition of revenue.

The boards noted that while revenue is an important number to users of financial statements in assessing a company's performance and prospects, revenue recognition requirements in U.S. generally accepted accounting principles differ from those in International Financial Reporting Standards and both are considered in need of improvement. The GAAP requirements comprise numerous standards. Many are industry specific and some can produce conflicting results for economically similar transactions. Although IFRS contains fewer standards on revenue recognition, its two main standards have different principles and can be difficult to understand and apply beyond simple transactions.

The boards said that their objective is to improve the existing guidance in both IFRS and GAAP by developing a single revenue model that can be applied consistently regardless of...