Revenue Recognition Assignment Example | Topics and Well Written Essays - 250 words

Revenue Recognition - Assignment Example International Financial Reporting Standards don’t have many requirements on revenue recognition. IAS 18 and IAS 11 are international accounting standards that focus on revenue and construction contracts respectively. The standards are difficult to understand and application in a situation. They provide minimal guidance concerning revenue recognition used for multiple arrangements. FASB and IASB has set new accounting rules designed to assist converge global standards. The current and proposed standards will change how companies in the United States recognize their revenue on their financial and statements (http://www.fasb.org/intl/convergence_iasb.shtml). The proposed standards will have some different effects on various companies. The effects may include changes in the amount of deliverables of the contract. The standards will affect the manner in which revenue is allocated to different deliverables. These changes affect key financial measures for companies in the United States (http://www.ifrs.org/News/Press-Releases/Pages/leases-exposure-draft-August-2010.asp). Companies in the software’s industry have specific guidance that enables them to run efficiently. Proposed standards provide software’s companies with an opportunity to develop their company with regard to the management and control of their financial statements. Companies will find it hard to market their products in a sensible manner to the company and get a positive reflection in the financial statements (http://proleasesoftware.com/fasb-lease-accounting). Financial Accounting Standards Board in conjunction with IASB is going to develop new accounting standards on the recognition of revenue from contracts. They are attempting to converge financial standards to create a single standard that will apply across various industries. The action will improve revenue recognition rules and replace industry specific practices that are difficult to sustain. The main aim of