All documents from essays.org are for research assistance purpose only. Do not present the material as your own work!
bookmark & share the essay...
FASB Ongoing Project for Revenue recognition
The paper is aimed at providing a single revenue model that can be applied consistently in the various industries and countries. The paper is also aimed at improving the comparability of solutions in the financial statements.
|language || ||english
|wordcount || ||4381 (cca 12 pages)
|contextual quality || ||N/A
|language level || ||N/A
|price || ||free
|sources || ||9
Table of contents
Objectives of the project 2
The FASB History, background of the project and its current status 2
The Scope 3
The proposed change and the reasons for the change 4
Problems that are encountered due to the use of the U.S GAPP 5
Problems that are involved with the use of IFRS 5
My Opinion/Thoughts 7
Preview of the essay: FASB Ongoing Project for Revenue recognition
FASB Ongoing Project for Revenue recognition Introduction The FASB project was prepared for the purpose of acting as an update and is summary of the project activities and the decisions that have been made by the international accounting standards board and the financial accounting standards board. This project was prepared by the board to provide information and convenience of the elements of the Boards. The Boards made tentative decisions that would make changes in the future meetings. However, these decisions do not have any changing effect to the current accounting as well reporting requirements. Revenue is considered to be an important measure to the users of financial statements (FASB, 2008). The people who use financial statements make use of revenue to determine the progress in the performance and prospects of a company. The revenue recognition requirements given in the generally accepted accounting principles are different from those in the international financial reporting standards. These two are usually put into consideration when an improvement is needed (FASB, 2008). The requirement found in generally accepted accounting principles are seen to compromise a number of standards some of which are industry specific. These principles ...
... constitute an entity’s ordinary or ongoing major or central activities. An increase in an asset leads to revenue recognition in a model that focuses solely on cash. This model ignores the possibility that the entity transfers the product to the customer since its only focus is on one asset cash.
An asset may be considered to be the product that the entity manufactures. An increase in a product would lead to revenue recognition in a model that focuses on the product being manufactured which is the inventory. The model ignores the possibility of another asset to have increased. Here, enhancement in the value of the product being manufactured would be the basis in which revenue will be recognized. Liabilities occur when the entity is under an obligation to deliver the product on a specific date. Where there is a decrease in liability leads to revenue recognition in a model that focuses on the settlement of such liabilities. The model ignores the increase in assets whether it has occurred.
Essay is in categories