SAB 101 Case Study

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In conclusion, because SAB 101 was released in order to curtail specific abuses, it should not be seen as a comprehensive treatise on the entire area of revenue recognition. The vast majority of companies apply the revenue recognition criteria in a very straightforward way with no questions from their internal/external auditors, from the SEC, or from investors. Thus, the revenue recognition issues covered in SAB 101 may not be comprehensive, but they are extremely important. The new revenue recognition will impact all public companies but mostly the industries such as telecommunications, software, engineering, construction and real estate. Modifications to how revenue is recognized are the way revenue is allocated, the time of revenue recognition,
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