Revenue Recognition Standards
1. Over the past few years, revenue recognition has become a highly controversial topic in accounting both
nationally and internationally. With multinational companies, this controversy may be attributed to the differences in IFRS and U.S. GAAP standards and requirements regarding revenue. According to the SEC, incorrect revenue recognition is the reason most companies are cited and required to restate their financial statements (SEC, 2011). This poses the questions: How do differences between the IFRS and US GAAP standards for revenue recognition impact multinational companies? Why are companies struggling to meet revenue recognition standards? Is there a lack of guidance regarding different types of revenue transactions?
With these thoughts in mind: I will write an analysis of IFRS and U.S. GAAP revenue recognition standards including their impact on multinational companies. Provide your opinion on whether or not there is sufficient guidance regarding different types of revenue transactions. Be sure to support your response with references to this week's Learning Resources. (half page)
2.Project Management Methodology
"Project maturity measurement models have been developed to measure the degree to which individual organizations have mastered state-of-the-art project management practices." (Mantel, Meredith, Shafer, & Sutton, 2011, p. 66). An organization's maturity level will dictate how project management is implemented and employed. In an organization with a lower maturity level, project management practices may be ill-defined. As organizations mature in their use of project management most will choose a standard methodology. In describing the purpose of the Project Management Body of Knowledge, PMI indicates that "this standard is a guide rather than a specific methodology. One can use different methodologies and tools (e.g., Agile, Waterfall, Prince2) to implement the project management framework" (Mantel et al., 2011, p. 2).
Scenario for the Discussion
You are a professionally certified project manager working for a consulting company. Your manager has just let you know that you will be assigned to work with a new client as soon as a contract is signed. The client wants help with selecting a project management methodology in order to increase the maturity level of project management practices in his organization. For confidentiality reasons, your manager cannot tell you anything else about the client or his business but still expects you to propose some solutions to the client in a meeting that is scheduled for three days from now. What would you do?
- Describe your approach for developing proposed solutions for the client to help them select a methodology. Why did you choose that approach?
- What are some of the characteristics of the methodologies that you will look at as you evaluate solutions? Why do you think those characteristics are important?
- How will you help the client understand the similarities and differences between methodologies? (Half page)
Differences in revenue recognition between IFRS and US GAAP significantly affect multinational companies. There is extensive guidance under US GAAP which in certain cases relates to specific industries. For instance there are well defined rules for software revenue recognition and sale of real estate. Such guidance is not provided in IFRS. The US GAAP gives exceptions for certain types of transactions which are not mentioned in the IFRS. Also companies following the IFRS must follow directions of SEC. The IFRS contains principles and examples which are not found in US GAAP. (See IAS 18). Specifically there are differences in the manner in which sales of goods (SAB 13), rendering of services (ASC 605-35), multiple elements (IAS 18), deferred receipt of receivables, and construction contracts are recorded. These differences create problems for companies to meet revenue recognition standards. The differences in IFRS and US GAAP create situations where improprieties occur. The SEC has issued SAB 101 which ...
The response provides you a structured explanation of project management methodologies and revenue recognition in accounting . It also gives you the relevant references.