Revenue Recognition in the United States Analytical Essay

Revenue Recognition in the United States
Explores the accounting issues and problems of revenue recognition in the United States, especially the changes in the approach.
# 151632 | 1,140 words | 6 sources | APA | 2008 | US
Published on Aug 17, 2012 in Business (Accounting) , Accounting (General)


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Description:

This paper explains that revenue recognition, which refers to the formal process of how transactions that involve the generation of revenues are documented or recorded, is not always simple because of complicated timing, of ways of measuring revenue and of the rise of internet marketing and business. Next, the author underscores that these problems are complicated further by the voluminous detailed guides that still have guidance gaps and issues. The paper concludes that to clarify this situation, the FASB board has developed preliminarily two approaches for measuring revenue recognition, which are the fair value revenue recognition model or the customer consideration model.

Table of Contents:
Introduction
Differentiating Revenue from Gain
Problem in Recognizing Earnings
Voluminous Detailed Guides
Guidance Gaps and Issues
Conceptual Guidance Flaws
FASB Project
Two Measurement Approaches
Conclusion

From the Paper:

"Guidance on how revenue recognition actually abounds in the literature of accounting, guides on accounting and auditing, among others, and even the SAB 104 of the Securities and Exchange Commission (Rev. of Revenue). The problem is that amidst the wealth of such literature, there is no single comprehensive source of guidance . In fact, there are some 140 authoritative pieces relating to revenue recognition.
"The United States has failed to develop a comprehensive revenue recognition guidance. What the country has done, instead, is to form varied bodies that set standards, each having varied authority levels that have addressed the issues on revenue recognition; in most cases, the issues were addressed as ancillary items in literature specific to an industry.
"The voluminous literature of detailed guidelines includes the Financial Accounting Standards Board or FASB's Statements, Technical Bulletins and Interpretations relating to particular revenue recognition aspects. There are also the consensuses issued by the Emerging Issues Task Force or EITF; and guidance issued by the American Institute of Certified Public Accountants or AICPA through Statements of Positions, Technical Practice Aids, and Practice Bulletins, and even Opinions during the pre-FASB days; the predecessor of AICPA also gave out Accounting Research Bulletins that are still effective today; and lastly, SEC likewise issued accounting bulletins and released financial reports and even gave staff speeches."

Sample of Sources Used:

  • Accountants' Handbook, Volume One, Financial Accounting and General Topics. (11th ed). Web. 28 June 2008. http://safari.ibmpressbooks.com/9780471790396/ carmichael0389c19-sec1-0001.
  • Briner, Russell F. (2001, March). Subtle Issues in Revenue Recognition. Web. 28 June 2008. http://www.nysscpa.org/cpajournal/2001/0300/dept/d035001.htm
  • Jay, Diane. Revenue Recognition. New Jersey TechNews. Feb. 2002: 6.1. PDF. Web. 28 June 2008. http://www.amper.com/pdf/revenuerecogdjay.pdf.
  • Project Updates: Revenue Recognition. Web. 28 June 2008. Financial Accounting Standards Board http://www.fasb.org/project/revenue_recognition.shtml
  • Rev. of Revenue Recognition in Today's Business Climate, by Patricia Lane Williams. AICPA. Web. 28 June 2008. http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/ Accounting/Standards/FASBStandards/PRDOVR~PC-732420/PC-732420.jsp

Cite this Analytical Essay:

APA Format

Revenue Recognition in the United States (2012, August 17) Retrieved December 06, 2021, from https://www.academon.com/analytical-essay/revenue-recognition-in-the-united-states-151632/

MLA Format

"Revenue Recognition in the United States" 17 August 2012. Web. 06 December. 2021. <https://www.academon.com/analytical-essay/revenue-recognition-in-the-united-states-151632/>

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