Lessors not to derecognize leased assets

In their joint meeting in Norwalk, Connecticut this past week, the IASB and FASB reached the tentative conclusion that lessors will no longer derecognize leased assets. Instead, lessors will recognize a receivable and a performance obligation with revenue being recognized over time. Some think this approach is more consistent with the proposed new revenue recognition [...] Read more > >

Round Table Discussion on Regulation FD

On Tuesday, Oct 20th, 4 pm ET, we will be joined by Bin Ke (Penn State University).  Bin will be discussing his recent paper, entitled “Why do cross-listed firms voluntarily adopt Regulation Fair Disclosure?” The paper is co-authored with Michael Crawley and Yong Yu, both of whom are from the University of Texas at Austin. [...] Read more > >

New Revenue Recognition Rules and Tech Firms

A student of mine brought to my attention an article in the Wall Street Journal September 24, 2009, “Investors Should Focus on Apple’s Core.”  In that article, Martin Peers points out that existing guidance for firms who have products that combine hardware and software, like Apple’s iPhone, required firms to obtain specific evidence about the [...] Read more > >

Does an asset-liability approach inevitably lead to fair value?

I’ve heard some people express the opinion that the FASB’s recent emphasis on an asset-liability approach is just a thinly veiled attempt to move financial reporting more in the direction of fair values. Ignoring the fact that the primacy of assets and liabilities is as old as the conceptual framework itself, I think recent evidence [...] Read more > >

Revenue Recognition and “Libby Boxes”: Research Brainstorming Roundtable

Revenue recognition is one of FASRI’s key target areas for research over the coming year.   We are going to take a big step forward on Tuesday, October 6th, 4pm by laying out some possible approaches to research studies on RevRec.  We will be structuring our discussion around the key independent variables that researchers might have [...] Read more > >

Get ready for earlier revenue recognition (and more estimation)

Are you ready for earlier revenue recognition (and more estimation)?  The FASB approved an EITF consensus (issue 08-1) this week in which the EITF dropped one of the key requirements that often precluded revenue recognition for delivered items in a multiple-element arrangement (think Apple and iPhones). In current accounting standards (EITF 00-21 or FASB Accounting [...] Read more > >

Round Table Discussion on Changes in the Revenue-Expense Relation

On Wednesday, September 16th, 11 am ET, Dain Donelson, Ross Jennings, and John McInnis, all of the University of Texas at Austin, will join us to discuss their recent paper entitled “Changes over Time in the Revenue-Expense Relation: Accounting or Economics?”  Their paper follows the work of Dichev and Tang (2008), who document Read more > >

Round Table Discussion on Proposed Changes to Revenue Recognition

On Tuesday, August 25th, 4 pm ET, we will be joined by Ted Christensen and Jeff Wilks (both of Brigham Young University) as we discuss the FASB and IASB’s proposed changes to revenue recognition. As you may know, Jeff played a significant role in the FASB/IASB joint project on revenue recognition during his time as [...] Read more > >

What did people say about the proposed revenue recognition model?

The comment letter deadline for the IASB/FASB discussion paper on revenue recognition was June 19, 2009. The staff recently presented a high-level summary of the 200+ comment letters received by the boards. Given my recent posts (July 30 and Aug. 11) on the AAA FASC’s comment letter, I thought it might be useful to consider [...] Read more > >

Why Matching Is Out of Vogue

So far, no one has responded to my questions about the importance of contracts for revenue recognition. So, let me venture to ask a few more questions that occurred to me while reading the FASC’s comment letter on the revenue recognition discussion paper. In their response to Q9, the authors state: The traditional “income statement” [...] Read more > >