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The New Joint Revenue Recognition Principles

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Introduction The following research paper is about the new joint revenue recognition principles that were unveiled by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), which standardizes generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) on recognition of revenue in the United States. The new joint revenue recognition principle was created to increase the financial transparency and the comparability within the industries in the United States of America, and as well as the industries throughout the world. The companies in the United States currently use the GAAP standards and the rest of the world uses the IFRS. But each country…show more content…
The joint standards board analyzed IAS 18, Revenue, and IAS 11, construction contracts. Trying to go through financial statements that do not use the same standard may be time consuming for auditors, so IASB and FASB deciding to combine those standards and redefine how to record revenue under a new joint standard may be the better option. In 2009 the IASB announced the decision to issue a joint standard with the FASB on revenue recognition. For the past five years, the IASB and the FASB periodically announced updates to the standard previously issued. The businesses and industries that use this revenue recognition standard should constantly watch for updates to existing standards, along with issuance of additional conjoint standards by the FASB and IASB. After thoroughly evaluating existing differences between GAAP and IFRS, recommendations for future joint standards will be discussed. Background The first revenue recognition principles were issued in 1984 when the FASB first issued Statement of financial accounting concepts (SFAC) number five. This statement
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