After 11 years of charting a new course for how to recognize revenue, the Financial Accounting Standards Board has wrapped up its discussions and is drafting the final language for the new standard.

The board voted 5-1 to instruct FASB staff to draft the final standard and circulate it for a final internal review meant to look for any wrinkles that may need ironed out before the final board vote. FASB's newest member, Jim Kroeker, abstained from voting given his short tenure on such a long-running project. FASB member Hal Schroeder dissented based on his disagreement with some key decisions in recent weeks that he says are inconsistent with the core principle of the standard.

FASB says it expects to issue the final standard at some point in the first quarter of 2014. FASB spokesman Chris Klimek said the drafting process takes time, especially for a standard of such magnitude as the revenue recognition standard. The new comprehensive rule will replace hundreds of historical accounting pronouncements, many of them inconsistent with one another and targeted only to specific industry sectors, with a single standard to be followed by entities of all type and size that follow U.S. Generally Accepted Accounting Principles. The International Accounting Standards Board is expected to issue a fully converged standard for International Financial Reporting Standards as well.

Tom Linsmeier, a FASB member who supported the project, said during an open board meeting that the new standard produces a complete framework for how to think about revenue in a broad, but consistent way. “This is a major accomplishment that will greatly change the way people think about what is perhaps the most important line in financial statements,” he said.

Board members such as Daryl Buck lamented the added cost that some entities will likely incur to implement the standard, especially in sectors that are perhaps more heavily affected by the new approaches, but he accepts the cost consequences as the price to be paid for more consistent, more comparable revenue recognition across all entities. “I recognize the transition costs will be disproportionately high for certain industries,” he said. “I wish that weren't the case.”

FASB met with the IASB recently to iron out some final points in its redeliberation and reached some final conclusions on licensing, variable consideration, and collectability that don't sit well with all FASB members. Schroeder said he dissented from the final standard because he disagrees with the threshold FASB set to tell companies at what point they should not recognize revenue if they have concerns about whether they ultimately will be able to collect payment from customers. “The core principle of this standard is to depict performance,” he said. “We've disconnected performance from the recognition of revenue by adding a constraint, and that's a disappointment.”