U.S. and international accounting rule makers want feedback on their initial efforts to bridge the wide gulf in their respective rules on recognizing revenue.

The Financial Accounting Standards Board and the International Accounting Standards Board have published a joint discussion paper on their work so far to establish a single revenue recognition model for use in U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards. It’s a preliminary step in establishing converged accounting standards for when and how entities should recognize revenue, especially for complex, multi-stage transactions.

U.S. rules on revenue recognition often are criticized as too voluminous and too inconsistent among various industries, leading to different outcomes for transactions that involve the same basic economics. International rules have been criticized for leading to inconsistent outcomes as well, but for the opposite reason: Their brevity and lack of specificity give preparers too little guidance and too much leeway.

The discussion paper outlines a single revenue recognition model intended to be applied uniformly across all industry sectors. The underlying concept is to require an entity to recognize revenue when it meets a performance obligation by transferring goods or services to a customer as agreed under contract. FASB and IASB acknowledge that the concept may be difficult to apply to certain kinds of transactions, such as some financial instruments, insurance contracts, and leasing contracts, for example.

The paper describes how a standard might establish recognition requirements based on contractual requirements and how performance obligations might be identified and satisfied. It also indicates the boards likely would pin the measurement of performance rights and obligations to the transaction price.

In a prepared statement, IASB Chairman Sir David Tweedie said now is the time for entities to get involved if they want to influence the ultimate direction of the revenue recognition model. “We believe that a single revenue model, applied consistently across various industries and countries, would greatly improve comparability of a key number in the financial statements,” he said. “We haven’t got all the answers yet, but we need to know whether we’re heading in the right direction.”

The boards are open to comments through June 19, 2009.