How Are You Recognizing Revenue? New Model to Impact Many Industries

By: Sarah Holub, Audit Associate

One amount almost everyone looks at on a company’s financial statements is REVENUE. Whether you know a lot or a little about accounting and finance, most people realize this number is at least somewhat important in analyzing a company’s performance and earnings quality.

There are currently over 100 standards on revenue and gain recognition in U.S. GAAP. This has resulted in many industry-specific standards that produce conflicting results for similar transactions leaving companies and practitioners with inconsistent and sometimes vague guidelines. As a result the IASB and FASB have issued Preliminary Views on Revenue Recognition in Contracts with Customers, a discussion paper to clarify the principles for revenue recognition and improve comparability and understandability.  

The main concept of the paper is the Contract-based Revenue Recognition Model. This proposed model works to reflect:

• The transfer of promised goods and services to customers, and not
• The activities of the entity in producing those goods and services
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Debt: Reducing It a Day at a Time

By: Erin E. Fann, CPA/PFS

Are you one of the majority of Americans dealing with debt?  Understanding the differences in the basic types of debt and loans can help you determine your best debt reduction strategy.

 Study Guide

Student loans are sometimes unavoidable with the rising tuition costs.  They can be attractive because of a few perks:

• Low interest rates
• Grace periods after graduation to begin repayments
• Tax-deductible up to $2,500 (limited based on income)

Keep in mind that grace periods and payment deferrals sound attractive, but they will increase your cost of tuition in the long-run.
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