European field-testing of the IASB ED Revenue from Contracts with Customers

In August 2011 EFRAG invited companies to participate in a European field-testing of the IASB ED Revenue from Contracts with Customers (revised 2011). The field-tests was carried out in cooperation with national standard setters and in close coordination with the IASB.

The purpose of the field-test of the ED was to:

• identify potential implementation and application difficulties;

• assess the potential impact of the proposals on financial statements;

• estimate the effort required to implement and apply the proposals.

The field-test did not assess whether the requirements proposed in the ED represented an improvement to current accounting practice. The field-test only provides input for such an assessment.

The participants in the field-test were asked to select some of their contracts, apply the requirements proposed in the ED on these contracts and report their findings at workshops.

All European entities expressing a wish to participate in the field-test were invited to participate. The entities participating in the field-test therefore do not constitute a representative sample of the entities that will be affected by the proposals. Similarly, the assessed directions and changes in elements of financial position and performance only reflect the outcome of the selected contracts based on the accounting practice currently chosen for those contracts.

The results of each company's tests were presented at the industry specific workshops.

Members of the IASB staff were present at the workshop and provided explanations on many of the issues raised by participants.

Feedback statements were prepared to summarise the input received at the workshops. Feedback statements from workshops of the following industries are or will be made available:

• Long-term construction excluding real-estate (two statements);

• Pharmaceuticals;

• Real-estate construction;

• Software;

• Telecommunication; and

• Utility providers.

The feedback statements constitute an integral part of EFRAG's comment letter in response to the ED.