Difference Between Fasb And Iasb Essay

1380 Words Nov 24th, 2015 null Page
The update about revenue recognition is a result of the ongoing convergence between FASB and IASB. Both accounting bodies have different rules and guidelines on how to report revenue. Under each body, there are different standards for various kinds of revenue. The FASB has topic 605 (Revenue Recognition). The IASB has IAS 18 (Revenue) and IAS 11 (Construction Contracts). The result was absence of uniformity in revenue recognition method across industries and geographical locations. The update was created to minimize these differences between FASB and IASB, and provide a general framework for reporting revenue that can be used across different industries and geography. According to FASB and IASB, below are the objective of the update
• Remove inconsistencies and weaknesses in revenue requirements
• Provide a robust framework for addressing revenue issues.
• Improve comparability of revenue recognition practices across entities, industries, jurisdiction, and capital markets.
• Provide more useful information to users of financial statement through improved disclosure requirements.
• Simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer.
The update was announced on May 28, 2014 and can be accessed online on the FASB and IASB website. For FASB, it is topic 606 and IASB is IFRS 15 Revenue from Contracts with Customers. The implementation will be after December 15, 2016 for public companies and after December 15, 2017…

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