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The paper lists the five steps a company would have to follow in order to apply the new revenue recognition proposal and then explores the concerns of the construction industry in implementing these new standards. The paper explains that construction companies would not be able to recognize any revenue until ownership of a project is transferred to the client, and, these financial statements will require more time to create and and will therefore be costly. The paper admits that the need for more stringent policies is greater now than ever, but argues that an attempt to create a "one size fits all" policy may not be the best type of policy to implement in the complex global economy.
From the Paper:"In October 2002, FASB and IASB publicly issued a memorandum stating their commitment towards a united accounting standard (Business Wire, 1). Today, the two Boards have created an exposure draft for the project, and held a comment period that ended October 22, 2010. The project aims to provide a solid framework for addressing recognition discrepancies, simplify financial statement preparation, dispose of inconsistencies or weaknesses in existing standards, and "improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets" (fasb.org, Project Updates). The key notion of the draft is that revenue should be recognized from contracts when a business transfers goods (or services) to the customer in the amount the business receives or expects to receive from the customer (FASB News Release 06/24/10)."
Sample of Sources Used:
- Business Wire. FASB and IASB Agree to Work Together Toward Convergence of Global Accounting Standards. October 29, 2002. http://www.allbusiness.com/company-activities-management/company-strategy/6001983-1.html.
- FASB. Proposed Accounting Standards Update: Revenue Recognition from Contracts with Customers. FASB in Focus. June 2010. http://www.fasb.org/cs/ContentServer?c=Document_C&pagename=FASB%2FDocument_C%2FDocumentPage&cid=1176156952697#summary.
- Greer, Michael. Re: Proposed Changes to Revenue Recognition Standards. Comment Letter No. 20. IASB.org
- IASB and FASB Propose a New Joint Standard for Revenue Recognition. News Release 06/24/10. http://www.fasb.org/cs/ContentServer?c=FASBContent_C&pagename.
- Martin, Jimmy W. Auditor Skepticism and Revenue Transactions. The CPA Journal. 2002.
Cite this Persuasive Essay:
IASB/FASB Revenue Recognition Standard (2010, December 23) Retrieved October 16, 2021, from https://www.academon.com/persuasive-essay/iasb-fasb-revenue-recognition-standard-146211/
"IASB/FASB Revenue Recognition Standard" 23 December 2010. Web. 16 October. 2021. <https://www.academon.com/persuasive-essay/iasb-fasb-revenue-recognition-standard-146211/>