An interesting piece by Sarah Johnson in CFO.com: if the SEC’s idea for removing the reconciliation between US GAAP and IFRS-presented financials becomes a reality, then there could be unexpected fallout for companies in the tech sector. The revenue of tech companies following US GAAP might look like it’s growing more slowly than companies following IASB standards.

If two companies have the same identical contract kind of contract, containing elements with different deliverable dates, the one following US GAAP will recognize revenue only as the components are delivered. The one following IFRS would be able to estimate the fair value of the yet-to-be delivered items and recognize the revenue up front. (That’s not too far afield from “gain-on-sale” accounting, which nobody seems to really like - once it stops working, anyway.)

Might be a case of the law of unintended consequences at work: maybe that helps pave the way to success for the SEC’s other international project, which is the concept release proposing that domestic firms get a choice between reporting in US GAAP or IFRS.