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Dr. Epstein served as the lead author of 14 annual editions of Wiley IFRS (1997 through 2010), and 26 annual editions of Wiley GAAP (1985 through 2010), all published by John Wiley & Sons.
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Accounting for Revenue Recognition
IFRS versus GAAP
Listed below are some of the major differences in accounting for revenue recognition between International Financial Reporting Standards (IFRS) and U.S. GAAP. This material is excerpted from Wiley IFRS 2010: Interpretation and Application of International Financial Reporting Standards.
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U.S. GAAP Revenue Recognition |
IFRS Revenue Recognition |
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Conceptual framework offers guidance (major project in process to provide revised standard for revenue recognition based on statement of financial position changes); specific guidance on limited matters (e.g., software development; construction)
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Some specific guidance offered under IFRS (a separate standard on revenue recognition exists, unlike U.S. GAAP) |
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Generally must amortize revenue over service period, no up-front recognition under GAAP
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More possibility for up-front revenue recognition when performance has occurred |
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Revenue recognition deferred on delivered part of multi-element contract if refund would be triggered by failure to deliver remaining elements
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Revenue generally recognized on delivered part of multi-element contract even if refund triggered by failure to deliver remaining ele-ments, if delivery is probable |
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Revenue-cost and gross-profit approaches to percentage-of-completion both allowed for long-term construction contracts; use of completed contract method under certain circum-stances is required
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If percentage cannot be reliably estimated, use of cost recovery method required; revenue-cost approach to percentage of completion mandatory; completed contract method banned |
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Joint project with IASB, likely will adopt new assets and liabilities approach to revenue recognition
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Joint project with FASB, likely will adopt new assets and liabilities approach to revenue recognition |
Contact IFRS international accounting expert Dr. Barry Epstein, CPA for more information. Learn more about Dr. Epstein at www.ifrsaccountant.com. He can be reached at BEpstein@SSandG.com or 312-464-3520.
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