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Review the new revenue recognition guidance issued by the Financial Accounting Standards Board http://www.fasb.org/jsp/FASB/Page/ImageBridgePage&cid=1176169257359 and answer the following questions. • What is the new standard as of ASC 606? What does that mean to you? • What are the recommended steps companies should follow to achieve the core principle? • How does this change current GAAP standards? • Who is required to adhere to this new standard?

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Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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Chapter
Section
FindFindarrow_forward

Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 9, Problem 1TP
Textbook Problem
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Review the new revenue recognition guidance issued by the Financial Accounting Standards Board http://www.fasb.org/jsp/FASB/Page/ImageBridgePage&cid=1176169257359 and answer the following questions.

• What is the new standard as of ASC 606? What does that mean to you?

• What are the recommended steps companies should follow to achieve the core principle?

• How does this change current GAAP standards?

• Who is required to adhere to this new standard?

To determine

(a)

Introduction:

The revenue recognition concept in accounting principles is referred to as identification of proceeds or revenue in an accounting period in which it was earned by a company. Revenue is not recognized as earned until and unless goods and services are provided to the customer(s).

To explain:

The new standard as of ASC 606 on revenue recognition.

Explanation of Solution

The new standard of ASC 606 on revenue recognition has stated the new guidelines with the aim to ascertain useful information and report it to the stakeholders and users of the financial information. The new guidelines aim at:

  • Removing any shortcomings and instability in the existing revenue recognition principle.
  • Providing a more detailed framework for dealing with revenue related issues...
To determine

(b)

To explain:

The steps companies must follow to attain the core principles.

To determine

(c)

To explain:

The changes in current GAAP standards due to new revenue recognition guidelines.

To determine

(d)

To explain:

The adherence to the new revenue recognition guidelines.

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Chapter 9 Solutions

Principles of Accounting Volume 1
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