Analyzing Revenue Recognition Methods

Analyzing Revenue Recognition Methods

Managers must determine which revenue recognition method is best for a company while complying with revenue recognition rules.

1. Describe different revenue recognition methods under GAAP and IFRS.
2. Define ADR firms.

Suppose the selected ADR firm is considering whether to report revenues under U.S. GAAP or IFRS, and their choice will determine which stock exchange ADR trades.

3. Describe the U.S. stock exchanges versus international ones in terms of requirements for listing company stocks for trading.
4. What does management need to know, estimate, and assume to determine which revenue recognition method is best for the firm?

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