Article Write-Ups De Mesa Graziano (2005) research titled “Revenue Recognition: A Perennial Problem” about the topic of revenue recognition being the regulators and standard-setter’s, as well as financial statement users and preparers major priority (p.28). De Mesa Graziano mentioned Colleen Cunningham, FEI president and CEO identification of revenue recognition being the 2005 third of top 10 financial reporting issues, Financial Accounting Standards Advisory Council (FASAC, 2004) member’s survey identification of revenue recognition as top priority of the FASB, and SEC’s director of enforcement Linda Thomsen identified revenue recognition as a “classic accounting issue’ that will continue to hunt and even mutate in the accounting profession
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Anson Thrower, member of FASB and FASAC, stated “the definition of revenue based on the concept of an earnings process has always been flawed" since the 1960, and Professor Robert Sterling of University of Kansas, who demonstrate “the term revenue are redundant synonyms of realization, earnings process and exchange transaction and, therefore, circular, repetitious and ambiguous” (p.29). De Mesa Graziano indicated that the FASB, SEC and other standard sitting body have a total of 190 literatures related to revenue recognition and counting as FASB and IASB is working together to develop conceptual guidance (p.29). De Mesa Graziano summarized the FASB/IASB asset-and-liability approach for all public and private companies, where revenue recognition is a result from the changes in asset and liabilities, instead of realization and earned criteria, which will cause some changes on companies reporting that involve complicated transactions and cited Raynond J Bromark, FASAC member and Pricewater-houseCoopers partner’s, warning that the asset-and-liability approach could potentially be “viewed as subtle to financial statement users, may result in significantly different accounting, which may cause confusion in the capital markets” and that some SMEs “already have trouble making balance sheet valuations independently of their underlying transactional accounting systems" (pp.29-31). In addition to, De Mesa Graziano also cited Ronald Olejniczak, chairman of FASB/IASB and subcommittee of FEI, who showed excitement on the debate about the asset-and-liability approach compared to realization and earned criteria, and mentioned Olejniczak believed that the current accounting standards for revenue recognition “is comprised of a number of loosely fitting pieces of guidance which have evolved over time in response to specific situations, as well as concept statements”
Anson Thrower, member of FASB and FASAC, stated “the definition of revenue based on the concept of an earnings process has always been flawed" since the 1960, and Professor Robert Sterling of University of Kansas, who demonstrate “the term revenue are redundant synonyms of realization, earnings process and exchange transaction and, therefore, circular, repetitious and ambiguous” (p.29). De Mesa Graziano indicated that the FASB, SEC and other standard sitting body have a total of 190 literatures related to revenue recognition and counting as FASB and IASB is working together to develop conceptual guidance (p.29). De Mesa Graziano summarized the FASB/IASB asset-and-liability approach for all public and private companies, where revenue recognition is a result from the changes in asset and liabilities, instead of realization and earned criteria, which will cause some changes on companies reporting that involve complicated transactions and cited Raynond J Bromark, FASAC member and Pricewater-houseCoopers partner’s, warning that the asset-and-liability approach could potentially be “viewed as subtle to financial statement users, may result in significantly different accounting, which may cause confusion in the capital markets” and that some SMEs “already have trouble making balance sheet valuations independently of their underlying transactional accounting systems" (pp.29-31). In addition to, De Mesa Graziano also cited Ronald Olejniczak, chairman of FASB/IASB and subcommittee of FEI, who showed excitement on the debate about the asset-and-liability approach compared to realization and earned criteria, and mentioned Olejniczak believed that the current accounting standards for revenue recognition “is comprised of a number of loosely fitting pieces of guidance which have evolved over time in response to specific situations, as well as concept statements”