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The impact of interest groups on the issuance of new accounting standard on revenues from contracts with customers

The process of creating and issuing internationally accepted accounting standards is usually long-lasting and complex process. Accounting standards which are most widely applied are International Financial Reporting Standards and US Generally Accepted Accounting Standards. Those two sets of standards converge since 2002 when Norwalk agreement between the IASB and the FASB has been signed. Those standard setters acknowledged their commitment to develop high quality and comparable accounting standards that could be used both for domestic and cross border financial reporting. As a result of this co-operation, a new common revenue standard was issued. This standard should increase the comparability of financial statements for companies operating in the same industry and also for the companies applying different accounting standards - US GAAPs and IFRSs. The International Accounting Standards Board follows rigorous open due standard setting process which includes the publication of all relevant documents in standard setting process on its website. The public is invited to take part in standard setting process by sending comment letters on documents published on the IASB’s official website. Prior to issuing a new standard, the IASB issued Exposure draft and different interest groups sent comment letters to the IASB to point the potential shortcomings in a standard and potential problems in its practical implementation. This paper analyses the procedure of issuing a new standard on revenues (IFRS 15 – Revenues from Contracts with Customers). The purpose of this paper was to identify the most important interest groups that influenced the content of IFRS 15 by sending comment letters on proposed exposure drafts. In order to make relevant conclusions, all publicly available documents related to comment letters received from public on initial and revised exposure draft have been analysed. The research has shown that the most comment letters on new revenue standard has been received from the preparers of financial statements and from accounting professionals, namely accountants, auditors, accounting firms and organizations. We noticed that non- accounting organizations and associations at the national and international levels are also interested in the content and application of new accounting standard on revenues. Regulators at national and international level and national standard setters were also involved in due standard setter process. The smallest number of comment letters was received from academics and financial statement users.

IFRS 15, interested groups, due process, IASB, FASB, revenues

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