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Revenue recognition for technology companies

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18 Oct 2010

In June 2010, the IASB and the FASB jointly published an Exposure Draft (ED) on Revenue from Contracts with Customers.

If adopted, the proposals would supersede IAS 11 Construction Contracts and IAS 18 Revenueand related interpretations. The core principle proposed in the ED would require an entity to recognise revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to receive in exchange for those goods or services.

What makes this ED even more significant is that the two GAAPs differ most in their approach: current IFRS has comparatively little guidance, compared to the series of detailed rules on application that US GAAP has.

Deloitte UK has now published Revenue recognition for technology companies, giving examples of how the proposed approach in the Exposure Draft will be applied in scenarios common to technology companies who report under both IFRS and US GAAP.

Click for Revenue recognition for technology companies (PDF 2,295k). Comment deadline on the ED is 22 October 2010.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.