Acta Univ. Agric. Silvic. Mendelianae Brun. 2009, 57, 29-44
Published online 2014-10-07

Development of the common standard for revenue recording as a part of the US GAAP and IAS/IFRS systems convergence

Hana Bohušová

Ústav účetnictví a daní, Mendelova zemědělská a lesnická univerzita v Brně, Zemědělská 1, 613 00 Brno, Česká republika

The most significant difference between US GAAP and IFRSs is in the area of general approach. IFRSs are based on basic accounting principles1 with limited application guidance, US GAAPs are based especially on rules with specific application guidance. FASB and IASB initiated their joint project on revenue recording to converge IFRS and US GAAP in this area. The main objective of this paper is comparative analysis of revenue recognition under both systems, evaluation of the most significant differences in revenue recognition and measurements as a starting point for the preparation of the new general standard for revenue recognition and the new approach to the revenue recognition development.
In this paper, the current approaches to revenue recognition under both systems are compared. The most significant difference is the general approach to revenue recognition. There is the Conceptual Framework where revenue is defined, two standards on revenue recognition and interpretations concerning revenue recognition and measurement in the IAS/IFRS. On the other hand, there are many standards and guidance concerning revenue in the US GAAP. Revenue is defined in the Statements of Financial Accounting concepts (CON 5, CON 6). There is not any general standard for revenue recognition under the US GAAP. The most significant differences in revenue recognition concern the long-term contracts and deferred payments. Despite this difference, there are many similarities between both systems.
Based on the results of the comparative analysis which was done in the paper, a new approach for re­ve­nue recognition based on principles for the new general standard for revenue recognition common for both systems is being developed.


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