A New Model for Revenue Recognition: Key Changes to Generally Accepted Accounting Principles
26 Pages Posted: 27 May 2014
Date Written: April 25, 2014
Over the past few years, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have joined together to create a new model for revenue recognition. In the second quarter of 2014, the final version of this model will be issued and the implementation process for the new requirements will begin. The new standard aims to unify U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) and steers away from the current industry-specific guidance for revenue recognition in the direction of a more consistent, principle-based standard. This paper examines the key differences between current revenue recognition guidance under U.S. GAAP and the new revenue recognition model and offers recommendations for the implementation of the new model.
Keywords: revenue recognition, ASC 605, contract, FASB, IASB, GAAP, IFRS, retrospective, implementation, transaction price, performance obligation
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