- Published: Monday, 24 September 2012 12:30
The Financial Accounting Standards Board in conjunction with the International Accounting Standards Board (IASB) has issued an exposure draft, which will likely take effect for fiscal years commencing after January 2015, that addresses revenue recognition. This update to the standard (topic 650) has direct applicability to government contractors and may affect the timing and amount of revenue recognized under long-term contracts. In particular, the updated standard serves to clarify a key element in the recording of revenue, namely; the transfer of ownership and control of the asset or service to the customer. This transfer may occur “over time” or at “point in time”. This is perhaps easily understood for tangible goods but less clear for services.