Accounting for revenues: A framework for standard setting

James A. Ohlson, Stephen H. Penman, Yuri Biondi, Robert J. Bloomfield, Jonathan C. Glover, Karim Jamal, Eiko Tsujiyama

研究成果: Article

12 引用 (Scopus)

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This paper proposes an accounting for revenues as an alternative to the proposals currently being aired by the FASB and IASB. Existing revenue recognition rules are vague, resulting in messy application, so the Boards are seeking a remedy. However, their proposals replace the traditional criteria-revenue is recognized when it is both "realized or realizable" and "earned"-with similarly vague notions that require both the identification of a "performance obligation" and the "satisfaction" of a performance obligation. Our framework aims for the concreteness that yields practical accounting solutions. It has two features. First, revenue is recognized when a customer makes a payment or a firm commitment to pay. Second, revenue recognition and profit recognition are combined, with profit recognition determined on the basis of objective criteria about the resolution of uncertainty under a contract, and then conservatively so. Two alternative approaches are offered: the complete contract method (where profit is recognized only on the termination of a contract) and the profit margin method (where a profit margin is applied to recognized revenues throughout the contract as the contract profit margin becomes clear. The latter requires resolution of uncertainty, so the completed contract method is the default.

元の言語English
ページ(範囲)577-592
ページ数16
ジャーナルAccounting Horizons
25
発行部数3
DOI
出版物ステータスPublished - 2011 9
外部発表Yes

ASJC Scopus subject areas

  • Accounting

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    Ohlson, J. A., Penman, S. H., Biondi, Y., Bloomfield, R. J., Glover, J. C., Jamal, K., & Tsujiyama, E. (2011). Accounting for revenues: A framework for standard setting. Accounting Horizons, 25(3), 577-592. https://doi.org/10.2308/acch-50027