Revenue Recognition - Comparison of IFRS vs US GAAP
13 Feb '09
7 CPD / CPE Hours
In recent years, revenue recognition has been one of the most important and controversial topics in financial reporting. The International Accounting Standards Board (IASB) has received more questions in this area from companies adopting IFRS than any other topic. Under US GAAP, incorrect revenue recognition is the reason most often cited by the SEC for requiring companies to restate their financial statements.
Under IFRS, there is one major standard on revenue (IAS 18), but the concern has been that there is not enough guidance regarding different types of revenue transactions, particularly in the area of industry standards.
In the US there is no comprehensive standard on revenue recognition, but there are more than 100 pronouncements that contain guidance on very specific revenue recognition topics. These include FASB standards, interpretations, staff positions and concept statements, as well as guidance provided by the SEC, AICPA and the Emerging Issues Task Force.
The IASB and the FASB have undertaken a joint revenue recognition project as well as independent projects that that will result in changes to current accounting practices over the next several years.
About the seminar
...................................................................................................................................................................................
This course provides the information needed to navigate complex issues regarding the recognition and measurement of revenue. Concise explanations are provided, with numerous examples presented to illustrate application of the standards. Information on the latest pronouncements (including those not yet effective) and other pending issues is also presented. Current guidance is provided for companies adopting IFRS for the first time and for companies that need to reconcile their local GAAP to either IFRS or US GAAP. Course participants are also brought up-to-date on the joint IASB-FASB revenue recognition project and changes to financial statement presentation.
This workshop answers questions such as:
» What revenue reporting issues have been most recently scrutinised by regulators?
» Where can guidance for unique revenue recognition situations be found?
» What are the differences between IFRS and US GAAP in accounting for revenue?
» How are the separate elements in multiple-element arrangements identified?
» What upcoming changes are anticipated in accounting for revenue?
Outline
....................................................................................................................................................................................
1. Review of Important IFRS and US GAAP pronouncements relating to revenue
2. IAS 18 Revenue - Applying the Standard to:
» Sale of goods (five criteria)
» Delivery of services (stage of completion method)
» Determining revenue policies where guidance is lacking
3. US GAAP
c SEC criteria (SAB 104)
» FASB Statements and Interpretations
» FASB Staff Positions (SOP) - In depth review of SOP 97-2
» Emerging Issues Task Force (EITF) update
» Other pronouncements
4. Current Issues:
» Revenue with right of return
» Delivery and substantial performance
» Multiple-element contracts
» Gross versus net reporting (including taxes collected and remitted)
» Deferred payments (discounted cash flow)
» Sale and repurchase agreements
» Bill and hold sales
» Vendor consideration given to a customer
» Reimbursements for out-of-pocket expenses
» Nonrefundable advance payments received
» Effect of fair value measurement
» Accounting for the sale of real estate subject to a buy-sell clause
» Current Status of IASB and FASB Revenue Projects
» Changes to Financial Statement Presentation
Facilitator
...................................................................................................................................................................................
Andrew Olding, FCCA
Andrew has more than 25 years of fi nancial management experience working with US companies in Europe, North America and Asia .
His experience includes manufacturing, consulting, fi nancial services and hi-tech entities with an emphasis on US GAAP, fi nancial reporting, corporate governance & compliance and SEC reporting.
Andrew has drafted and presented various revenue recognition training programs and policies for both sales management and fi nance professionals within several US public companies. He has worked with several major audit fi rms, including PwC, Ernst & Young, Grant Thornton and Deloitte & Touche to ensure that appropriate revenue recognition policies were crafted and implemented and that revenue was recognized in accordance with the applicable US GAAP pronouncements.
