The European Financial Reporting Advisory Group (EFRAG) has issued its draft comment letter on IASB Exposure Draft Revenue from Contracts with Customers.
In general, EFRAG welcomes the changes made to the Exposure Draft and notes that many of its concerns have now been solved. However, EFRAG disagrees with the proposals to:
- limit the onerous test to performance obligations satisfied over a period of time greater than one year
- perform the onerous test at a performance obligation level
- offset advances received against contract assets in all circumstances
- only permit the allocation of a contingent amount to one or all performance obligations within a contract
- require a list of specific disclosure requirements in IAS 34 Interim Financial Reporting
- include only sales-based variable consideration in the special requirements for when to recognise revenue related to licence agreements of intellectual property
The draft comment letter also raises a number of other concerns.