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Revenue Recognition under IFRS Revisited: Conceptual Models, Current Proposals and Practical Consequences

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  • Jens Wüstemann
  • Sonja Kierzek

Abstract

Since 2002, the FASB and the IASB have been undertaking a joint project on the revision and convergence of US GAAP and IFRS revenue recognition. Even though the outcome of the project is still open, the project's course as well as trends in recently published IFRS and other current IASB projects suggest that existing earnings-based and realisation-based IFRS revenue recognition criteria are likely to be replaced by a radically new approach. This paper demonstrates the inconsistencies in current IFRS revenue recognition that have triggered the project and then presents and discusses three conceptually different revenue recognition models that are internationally debated at present. The paper concludes that a major revision of existing IFRS revenue recognition as proposed by the FASB and the IASB is not required. It is argued that the perceived deficiencies should rather be solved on the basis of current transaction-based IFRS revenue criteria.

Suggested Citation

  • Jens Wüstemann & Sonja Kierzek, 2005. "Revenue Recognition under IFRS Revisited: Conceptual Models, Current Proposals and Practical Consequences," Accounting in Europe, Taylor & Francis Journals, vol. 2(1), pages 69-106, January.
    • Handle: RePEc:taf:acceur:v:2:y:2005:i:1:p:69-106
    DOI: 10.1080/09638180500379111
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    Cited by:

    1. Gaisha Shulenbayeva & Aigul Jondelbayeva & Aliya Nurgaliyeva & Azamat Zhanseitov & Ainur Myrzhykbayeva, 2022. "Organization of construction accounting in the process of sustainable development," RIVISTA DI STUDI SULLA SOSTENIBILITA', FrancoAngeli Editore, vol. 0(2), pages 11-28.
    2. Carien van Mourik & Yuko Katsuo Asami, 2018. "Articulation, Profit or Loss and OCI in the IASB Conceptual Framework: Different Shades of Clean (or Dirty) Surplus," Accounting in Europe, Taylor & Francis Journals, vol. 15(2), pages 167-192, May.
    3. Müller, Julian, 2014. "An accounting revolution? The financialisation of standard setting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(7), pages 539-557.
    4. Kabir, Humayun & Su, Li, 2022. "How did IFRS 15 affect the revenue recognition practices and financial statements of firms? Evidence from Australia and New Zealand," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 49(C).
    5. Jannis Bischof & Holger Daske, 2016. "Interpreting the European Union’s IFRS Endorsement Criteria: The Case of IFRS 9," Accounting in Europe, Taylor & Francis Journals, vol. 13(2), pages 129-168, May.
    6. Miloslav Janhuba, 2006. "Some remarks to innovative approach in Revenue Recognition by International Financial Reporting Standards [Poznámky k inovovaným přístupům Mezinárodních standardů účetního výkaznictví k výnosům]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2006(4), pages 132-135.
    7. Susana Callao & José Ignacio Jarne, 2010. "Have IFRS Affected Earnings Management in the European Union?," Accounting in Europe, Taylor & Francis Journals, vol. 7(2), pages 159-189, December.

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