Accounting for the Public Interest: A Revenue Recognition Dilemma

2013 ◽  
Vol 28 (3) ◽  
pp. 691-703 ◽  
Author(s):  
Arline Savage ◽  
Douglas C. Cerf ◽  
Roberta A. Barra
Keyword(s):  
Public Interest ◽  
Financial Accounting ◽  
Revenue Recognition ◽  
Accounting Standard ◽  
External Auditors ◽  
The Public ◽  
Gray Area ◽  
Societal Problem ◽  
Accounting Rules ◽  
International Accounting Standard

ABSTRACT: This case illustrates how accounting rules impact the public interest and vice versa. The setting is a gray area of accounting in which management, the external auditors, the SEC, and international accounting standard setters may have differing opinions about the accounting treatment. Students consider the situation in which an accounting rule leads to a business and societal problem. They gain an understanding of how this happens and how such problems can be addressed. The context for this case is a revenue recognition issue for bill-and-hold sales. It also provides students with the opportunity to consider the real-world implications of accrual- versus cash-based accounting. This case is useful for intermediate- to graduate-level financial accounting classes or an accounting capstone class.

scholarly journals Challenges, Advantages and Disadvantages in Implementation of Ifrs 15 in Different Industries

2019 ◽  
Author(s):  
Ivana Pavić ◽  
Ivana Mamić Sačer ◽  
Lajoš Žager
Keyword(s):  
Financial Statements ◽  
International Accounting ◽  
International Accounting Standards ◽  
It Infrastructure ◽  
Multiple Sources ◽  
Revenue Recognition ◽  
Accounting Standard ◽  
Advantages And Disadvantages ◽  
Accounting Rules ◽  
International Accounting Standard

The accounting rules related to revenues’ recognition and measurement have not been changed for many years, and have been listed in International Accounting Standard 18 – Revenues, which has been in use since 1984. Practice has shown that the standard is no longer an adequate basis for revenue recognition and therefore the International Accounting Standards Board (IASB) in cooperation with American FASB has created and published a new accounting standard that addresses the issue of revenue recognition – IFRS 15 – Revenues from Contracts with Customers. This standard supersedes the application of IAS 18 as of January 1, 2018. Since revenue is a very important element in determining the profit or loss of an entity and therefore its performance, preparers of financial statements should pay full attention to accounting principles related to revenues’ recognition and measurement while preparing financial statements. New accounting standard for revenues introduces certain innovations in the field of revenue calculation as well as in time of revenues’ recognition. These changes will have a significant impact on the amount of revenues for certain industries, such as the telecommunications and construction industry, which have significant share of revenues from contracts with customers. The aim of the research is to identify the challenges and problems that appears in the initial phase of application of a new standard on revenues such as; the need to consider a larger volume of documentation, inadequate existing IT infrastructure, multiple sources of documentation that must be considered in revenue recognition, including commercial, legal and financial documentation etc. In addition, we plan to identify benefits form the application of the new standard for the entities preparing the financial statements. In this context, it is expected to identify the sectors that have the most dilemmas in the application of this standard and to propose potential solutions to address these problems.

scholarly journals The Differences Of Ijarah Financing and Conventional Lease On Islamic Law and Accounting Perspectives

IQTISHADUNA ◽  
2018 ◽  
Vol 8 (2) ◽  
pp. 139-148
Author(s):  
Fitriani .
Keyword(s):  
Financial Institutions ◽  
Islamic Law ◽  
Accounting Standards ◽  
Financial Accounting ◽  
International Accounting ◽  
Accounting Standard ◽  
Accounting Principles ◽  
Islamic Financial Institutions ◽  
International Accounting Standard

The main objective of this study is to explore the nature of accounting for Ijarahfinancing and its differences with conventional lease financing from the Islamic law and accounting perspectives.The study makes a comparison between the International Accounting Standard on leasing (IAS 17); the accounting standard for Ijarah (FAS 8) as developed by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI); and Statement of Financial Accounting Standards (Pernyataan Standar Akuntansi Keuangan/PSAK 107). The study found that there are major differences as to the nature of leasing and Ijarah, and as a result accounting principles that have driven all the three standards as well as accounting techniques developed for leasing and Ijarah are significantly different.

scholarly journals Accounting For OPEBs: Does Better Accounting Serve The Public Interest?

2011 ◽  
Vol 11 (3) ◽  
pp. 1 ◽  
Author(s):  
Timothy A. Pearson ◽  
Scott I. Jerris ◽  
Richard Brooks
Keyword(s):  
Health Care ◽  
Social Consequences ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Accounting Standard ◽  
Public Companies ◽  
The Public ◽  
Setting Process ◽  
Sfas 106 ◽  
Accounting Standard Setting

In 1992, the Financial Accounting Standards Board (FASB) issues Employers Accounting for Postretirement Benefits Other Than Pensions (SFAS 106). SFAS 106 requires public companies to account for postretirement benefits other than pensions (e.g., health care) on an accrual basis. While SFAS 106 is good accounting, it provides corporations with an excellent excuse to amend or terminate health care coverage for retirees. This paper discusses the economic and social consequences of SFAS 106 as well as the politics of the accounting standard setting process.

Implications of a Stakeholder View on Corporate Reporting

2007 ◽  
Vol 7 (1) ◽  
pp. 50-65 ◽  
Author(s):  
George Joseph
Keyword(s):  
Corporate Governance ◽  
Conceptual Framework ◽  
Public Interest ◽  
Financial Accounting ◽  
International Accounting ◽  
Financial Reports ◽  
The Public ◽  
Corporate Reporting ◽  
Stakeholder View

While the stakeholder view is increasingly being seen as an integral part of corporate governance, a corresponding view has not emerged in corporate reporting. This paper explores the possibility of a normative stakeholder view of corporate reporting by addressing the foundation of financial reports, the underlying mission of the conceptual framework contained in Statement of Financial Accounting Concepts No. 1. Specifically, the paper contrasts mission concepts to find a suitable foundation for the stakeholder view that would sufficiently project the ideas, and particularly the public interest perspective contained in that view. The paper also illustrates how the mission of corporate reporting extends to other areas in the conceptual framework and international accounting, and critically reviews the current trajectory of corporate reporting in the light of the implications of the stakeholder view.

A Black Hole in Democracy?

2021 ◽  
pp. 117-150
Author(s):  
Antoine Vauchez ◽  
Samuel Moyn
Keyword(s):  
Black Hole ◽  
Public Interest ◽  
Democratic Citizenship ◽  
The Political ◽  
Political Systems ◽  
The Public ◽  
The Core ◽  
Political Risks ◽  
Gray Area

This chapter offers a normative assessment of the political risks and diffuse democratic costs related to the blurring process, and considers its cumulative effects from the standpoint of democratic theory. It points at the role of the public sphere's autonomy as a critical condition for democratic citizenship. Because this gray area remains largely shielded from most forms of political and professional oversight, it has become a new democratic “black hole” in which professional intermediaries — lawyers, consultants, and so forth — thrive and prosper. When confronting this extraterritorial zone that has grown up at the core of political systems, and the corrosive effects of its expansion, democracies appear to be seriously underequipped. The blurring of the public–private divide not only weakens the capacity to produce a “public interest” that rests at bay from market asymmetries, but also the very ability to conceptually identify what such a “public interest” may be. This may be one of the biggest challenges ahead for neoliberalized democracies.

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