Revenue recognition is one of the most crucial issues in financial reporting and the prevalent source for recent accounting scandals. International financial reporting standard setters are conducting a major project rethinking revenue recognition. Tentative proposals of the project Revenue Recognition feature an asset-liability approach relying on measurement at fair values or at allocated customer consideration amounts. This paper chooses construction contracts to illustrate and to evaluate the far-reaching changes implied by the proposals in a multi-period context. Main results suggest that the proposals are ambivalent in terms of relevance but critical in terms of reliability compared to the recent treatment under IAS 11. Particularly, a pure fair value approach yields irritating patterns of revenue recognition found inappropriate for stewardship purposes. While its adoption for revenue recognition under IFRSs is unlikely due to regulatory incompatibilities, measuring performance obligations at allocated consideration amount partly mitigates the concerns.
| Identifer | oai:union.ndltd.org:DRESDEN/oai:qucosa:de:qucosa:36452 |
| Date | 05 December 2019 |
| Creators | Dobler, Michael |
| Publisher | Inderscience Publishers |
| Source Sets | Hochschulschriftenserver (HSSS) der SLUB Dresden |
| Language | English |
| Detected Language | English |
| Type | info:eu-repo/semantics/acceptedVersion, doc-type:article, info:eu-repo/semantics/article, doc-type:Text |
| Rights | info:eu-repo/semantics/openAccess |
| Relation | https://doi.org/10.1504/IJRM.2008.018175, 1474-7332, 1741-8186, 10.1504/IJRM.2008.018175 |
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