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The Value Relevance of Revenue Recognition under International Financial Reporting Standards

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  • Karina Kasztelnik

Abstract

This study examines if there has a major change in the value relevance of revenue recognition components since the adoption of International Financial Reporting Standards 15 in the United States. Our results show that the public firms revenue recognition are value relevant under United States of Generally Accepted Accounting Principles (US GAAP) and remain so after the adoption of IFRS. Also, for revenue recognition after IFRS, along with an increase in the value relevance in the future. These results are consistent with the proportion that revenue recognition plays a reinforcing role that complements the more complex IFRS accounts. Consequently, if the International Accounting Standards (IASB) were to mandate revenue recognition, it would, in all likelihood, provide users of accounts with a valuable incremental source of hard international transaction information.

Suggested Citation

  • Karina Kasztelnik, 2015. "The Value Relevance of Revenue Recognition under International Financial Reporting Standards," Accounting and Finance Research, Sciedu Press, vol. 4(3), pages 1-88, August.
    • Handle: RePEc:jfr:afr111:v:4:y:2015:i:3:p:88
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    References listed on IDEAS

    as
    1. S.P. Kothari & Karthik Ramanna & Douglas J. Skinner, 2009. "Implications for GAAP from an Analysis of Positive Research in Accounting," Harvard Business School Working Papers 09-137, Harvard Business School, revised Sep 2010.
    2. Kothari, S.P. & Ramanna, Karthik & Skinner, Douglas J., 2010. "Implications for GAAP from an analysis of positive research in accounting," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 246-286, December.
    3. Caylor, Marcus L., 2010. "Strategic revenue recognition to achieve earnings benchmarks," Journal of Accounting and Public Policy, Elsevier, vol. 29(1), pages 82-95, January.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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