A New Model for Revenue Recognition: Key Changes to Generally Accepted Accounting Principles

26 Pages Posted: 27 May 2014

See all articles by Kelly Fisher

Kelly Fisher

Texas Woman's University, School of Management, Students

Date Written: April 25, 2014

Abstract

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

Suggested Citation

Fisher, Kelly, A New Model for Revenue Recognition: Key Changes to Generally Accepted Accounting Principles (April 25, 2014). Available at SSRN: https://ssrn.com/abstract=2438118 or http://dx.doi.org/10.2139/ssrn.2438118

Kelly Fisher (Contact Author)

Texas Woman's University, School of Management, Students ( email )

Denton, TX
United States

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