Accounting rule makers have opened round two on their proposals to overhaul the accounting for revenue recognition, publishing their revised draft standard for a new wave of comment and feedback.

Based on nearly 1,000 comment letters, roundtables, and other feedback to their 2010 proposal, the Financial Accounting Standards Board and the International Accounting Standards Board have reworked their joint proposal for how all companies should account for revenue. They are accepting comments for 120 days and hoping to make any further changes at finalize the standard in late 2012 or early 2013.

FASB member Russ Golden said during a podcast to explain the proposal that the revised proposal still contains the same core principles established in the 2010 draft, requiring companies to follow five basic steps to determine when and how to recognize revenue. Companies would identify a contract with a customer, identify the separate performance obligations contained in the contract, determine the transaction price, allocate that transaction price to the separate performance obligations, and recognize revenue when or as each performance obligation is met.

“There was general support for the project objective and the core principles, but there were a lot of questions about how those principles would be applied in practice and some concerns about the cost of changing practice and the complexity,” Golden said. “In end way, the way I think about it: good concept, perhaps difficult to apply.”

In response to that feedback to the 2010 proposal, the boards made a number of changes focused on simplifying and clarifying the proposal, he said. As a result, the new exposure draft adds guidance on how to determine when a good or service is transferred over time and simplifies the proposal on warranties. It simplifies how an entity would determine a transaction price, especially where the price must take into accounting collectability and the time value of money, for example. It also provides a practical expedient for recognizing the expense associated with obtaining a contract, and it exempts non-public companies from some of the disclosure requirements.

Golden said the boards have not established an expected effective date, but they have promised the new standard would not take effect before 2015 for calendar year companies, with an additional year promised for non-public entities. He said the boards will determine an effective date as they move closer to finalizing the standard and are committed to assuring it will provide ample lead time for adoption.