To no one’s surprise, the IASB has issued a proposal to defer the effective date of the revenue Standard, IFRS 15 Revenue from Contracts with Customers, by one year to January 1, 2018.

Here’s how the news release summarizes this action:

• “The revenue Standard was issued jointly with the US Financial Accounting Standards Board (FASB), in May 2014, with an effective date of January 1, 2017.
• The main reason for the proposed deferral of the effective date is that the IASB is planning to issue an Exposure Draft of targeted amendments to the Standard, which will include clarifying some of its requirements and adding illustrative examples to aid implementation. These targeted amendments arise from discussions of the joint Transition Resource Group (TRG), established in conjunction with the FASB to support the implementation of the Standard.  The FASB is also currently consulting on a proposal to defer the effective date of its revenue Standard by one year.
• Feedback on the Exposure Draft Effective Date of IFRS 15 (Proposed amendments to IFRS 15) is required by July 3, 2015.  The IASB will consider the feedback at its July meeting when it expects to take a final decision on whether to change the effective date of the revenue Standard.
• Early application of the revenue Standard will continue to be permitted.”

The basis for conclusions to the exposure draft observes: “Changing the effective date of a Standard shortly after its issuance creates uncertainty for stakeholders and has the potential to set a bad precedent. The effective date is set after careful consideration of information obtained in the exposure process about the time needed to implement the requirements. Accordingly, the IASB would consider doing so only in exceptional circumstances.” These are the stated reasons why the IASB thinks it met that hurdle here:

• “(a) the IASB acknowledged that, although intended to provide clarity, the proposed amendments to IFRS 15…may affect some entities that would wish to apply the amendments at the same time as they first apply IFRS 15—those entities are likely to wish to avoid reporting changes to revenue when first implementing the Standard and then, within a year or two, potentially reporting further changes to revenue as a result of applying any amendments to the Standard. For those entities, a deferral of the effective date by one year would provide additional time to implement any amendments to the Standard.
• (b) IFRS 15 was issued later than had been anticipated when the IASB set the effective date of the Standard, which absorbed some of the implementation time that entities were expecting to have.
• (c) IFRS 15 is a converged Standard with (US) Topic 606—although not the only consideration, the IASB thinks that there are benefits for a broad range of stakeholders of retaining an effective date that is aligned with the effective date of Topic 606.”

It’s hard to imagine many respondents objecting to this proposal, but I can’t say I’m very enthusiastic about it. These supposedly exceptional circumstances sound to me merely like standard-issue whining and foot-dragging. Companies pull off remarkable feats of change all the time – their ability to do so is supposedly part of why we venerate private sector entities (and the highly paid people who lead them) more than the slow-moving wheels of government. It’s not remotely believable that a few months here or there in 2014 would make a difference to meeting a 2017 reporting deadline, to an entity that was really trying. Likewise, the other factors seem well within the range of challenges that entities deal with every day without missing a beat.

But even if I’m wrong there, and if a 2017 implementation date actually would cause some difficulties for some entities and their stakeholders, it shouldn’t be enough to tip the balance. IFRS 15 is meant to represent a major step forward in (using the IASB’s own words) the quality and consistency of financial statements, enhancing the reporting of a “vital metric” within the financial statements. If that’s true, it follows that current financial reporting is deficient (or at least sub-optimal) in this regard, and will continue to be so until the new standard is in place, and if that’s true in any way that matters, then investors must on a regular basis be making resource allocation decisions that aren’t appropriate given their tolerance for risk. If so, then fixing that as soon as possible should count for more than all the reasons cited.

The IASB’s deferral proposal suggests it isn’t actually such an urgent priority, which in turn only invites you to conclude that the new standard isn’t truly addressing a vital lack in current decision-making – if it takes until 2017 for a discussion paper published in 2008 to generate actual changes in financial statements, then indeed, why not wait until 2018, or 2020, or 2030, or forever? Rather than fretting and tweaking, the IASB squandered a good opportunity here to say, basically: it may have taken a long time to get here, but now we’re serious about this, and you should be too.

The opinions expressed are solely those of the author.