Anup Srivastava (Northwestern) will join us to lead a discussion on revenue recognition on Wednesday, April 29th at 11am ET.

Anup has a working paper that looks at firms who can exercise discretion over intertemporal allocations of revenue recognition, and in examining reactions to SOP 97-2, finds that firms use discretion to convey information, rather than to manage earnings.  Altamura, Beatty and Weber raise some similar questions about SAB 101, finding that many firms did manage earnings before that regulation became effective, but that the regulation still reduced the key measures of earnings quality.  Zhang finds, using the implementation of SOP 91-1 as an an event, that early (and more discretionary) revenue recognition makes reported revenue more timely, but at the cost of lower reliability.

These papers all have a fair bit of overlap, but that should allow us to generalize the discussion to ask what they tell us about the new discussion paper on revenue recognition?  I may be reading to much into this, but one distinction between the papers is that Srivastava takes more of a balance sheet perspective, which the discussion paper does as well.  Will that make it more relevant to standard setters?

See you there!