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Write a convergence memo XXXXXXXXXXwords) to the client discussing the current state of convergence between IFRS and U.S. GAAP on revenue recognition. You may use the "Memo Template" provided. In your...

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Write a convergence memo XXXXXXXXXXwords) to the client discussing the current state of convergence between IFRS and U.S. GAAP on revenue recognition. You may use the "Memo Template" provided. In your memo, be sure to address the following:

  1. Describe the similarities and differences in accounting for revenue recognition under the international standards and the FASB standards.
  2. Identify (in general terms) the possible impact on the financial statements of your specific company of changing from FASB to IFRS.
  3. How should these items be disclosed under IFRS and FASB?  
Answered 11 days AfterDec 13, 2017

Solution

David answered on Dec 24 2017
29 Votes
TO: The File    
FROM: Sonia To
es-Britton    
DATE: November 5, 2017    
SUBJECT: Promises in Contracts With Customers
Similarities and differences in accounting for revenue recognition:
As per the FASB and IASB revenue recognition has differences in the revenue recognition as per the Paragraph 78 of the FASB Concept no. 6, revenue definition confused the amount and measurement of the real revenue process, as per the revenue definition for the inflow of assets taken, this not defined that which of the inflow is recognize as the revenue and which one is not recognize as the revenue, there could be lot of chances that assets of the company can decrease or increase during the accounting period, while as per the IASB, revenue recognize clearly that gain of the assets or the income encompasses, revenue recognize by the ordinary activities like sales of the products, dividend received on the investment etc. Similarity between the FASB and IASB revenue recognition is that, both have the recognize revenue from the sale of the products and services and both have accounted the realized revenue in their standards. Both standards provide the economic benefits of the company in their rules and regulations. As per the IFRS, all revenue trade concern to transfer of services, sale of products and goods , constructional agreement, and others’ use of entity asset (royalties, yielding...
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