Have accounting standards caused a decline in “matching” over time?

Many accounting academics think that matching expenses to their associated revenues produces an earnings pattern that is useful to decision makers. As a result, these academics think that any decline in matching will produce less useful earnings information for financial statement users. Along these lines, a recent study by Dichev and Tang (2008) in The [...] Read more > >

Program Accounting for Costs

The IASB/FASB recently affirmed an earlier decision not to rewrite standards on inventory cost accounting as part of its revenue recognition project.  Other than the limited guidance already covered in the proposed new standard (on topics such as setup costs for service contracts, precontract costs, and inventory of a service provider), the boards have left [...] Read more > >

Boards Decide to Re-expose Revenue Recognition

In a press release issued today, the FASB and IASB announced their decision to re-expose the revenue recognition proposal. In their own words: It was the unanimous view of the boards that while there was no formal due process requirement to re-expose the proposals it was appropriate to go beyond established due process given the [...] Read more > >

Performance obligations: A new era.

A search of the FASB’s entire codification of accounting standards reveals only 8 references to the term “performance obligation,” with no definition.  The term does not appear in any current concepts statements.  Given it’s prominence in the exposure draft on revenue recognition, I expect that the term will become ubiquitous as the FASB-IASB convergence process [...] Read more > >

Audio of revenue recognition round table.

After clicking on “more” at the bottom of the first page of this post, click HERE for the audio of the revenue recognition round table. You can also see the slides by clicking HERE. Read more > >

Slides for today’s Round Table on Revenue Recognition

The FASB Revenue Recognition team has graciously provided us with power point slides which you may download prior to today’s round table discussion (at 4pm Eastern time).  Click here to download the slides, and click here for more information on today’s round table including how to tune in. Note: If you’re still on the screen [...] Read more > >

Who is complaining about POC accounting?

One of the frequent criticisms the revenue recognition project has received in the past few years is that the proposed new standard would change revenue recognition in areas that do not seem to pose any problems today. One example of that is the construction industry, where the proposed new standard has the potential to change [...] Read more > >

Does revenue recognition require a customer?

I’ve just finished reading the IASB/FASB exposure draft on revenue recognition, and I have all kinds of questions running through my head. But before I get to those questions, let me first say that I am very impressed with this document. In fewer than 90 paragraphs of guidance (ignoring application guidance), the IASB/FASB have laid [...] Read more > >

Revenue Recognition Exposure Draft Exposed

The FASB and IASB released their exposure draft of their proposed revenue recognition standards. From paragraphs IN8 and IN9 of the official document In summary, the core principle [of revenue recognition] would require an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration [...] Read more > >

SEC Chief Accountant Questions Convergence by June 2011

A recent Journal of Accountancy article states that the SEC Chief Accountant Jim Kroeker would support the FASB’s cutting the number of convergence projects due for completion in 2011. Here’s one excerpt from that article: “June 30, 2011, is an arbitrary deadline and it’s not one that’s been put in place by the SEC or [...] Read more > >