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Abstract
A broad overview is presented of the FASB-IASB revenue recognition project, specific accomplishments to date, and a projection of where the project is expected to lead in the future. The ED, Revenue Recognition from Contracts with Customers, contains proposals regarding when to recognize revenue, how to recognize revenue, and what to disclose. It also proposes guidance to clarify the accounting for some contract costs. The primary proposal is a five-step process that a company would follow in recognizing revenue. The steps are: 1. Identify the contracts with customers. 2. Identify the separate performance obligations. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations. 5. Recognize revenue when a performance obligation is satisfied. The proposed standard also clarifies accounting for some costs related to contracts with customers. The boards are also proposing enhanced disclosures to help users of financial statements better understand the amount, timing, and uncertainty of revenue and cash flows from contracts with customers.