The Financial Accounting Standards Board and International Accounting Standards Board are about to issue a new revenue standard. This paper highlights ten important changes that result from these revenue recognition rules.
The main goals of the FASB-IASB project are relatively straightforward ? convergence and consistency. The current standards differ significantly on revenue recognition principles. Current U.S. GAAP does not provide one, all-inclusive standard that applies to all transactions and industries.
And because current international standards provide fewer specific requirements, companies applying them often pick and choose specific U.S. GAAP guidance to fill in the holes. Soon-to-be-released revenue standards will contain a new approach to revenue recognition that will apply to revenue from contracts with customers across all industries.
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