IFRS Accounting for Revenue Recognition and Long Term Contracts

Revenue recognition

The general concepts and principles used for revenue recognition are similar between GAAP and IFRS. They differ in the details. GAAP provides specific guidelines for revenue recognition for many different industries whereas IFRS does not. The International Accounting Standards Board illustrates revenue as including both gains and revenues. When working …

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Net Present Value

NPV Net present value is the most used technique of capital investment appraisal. In simple terms, net present value is the value of net cash flows arising from the project after discounting it with discounting factor, also known as the cost of capital. Decision Criteria: A project should be accepted …

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The Pros and Cons of Adopting IFRS

pros and cons of IFRS

International Financial Reporting Standards (IFRS) is a set of accounting standards developed by the International Accounting Standards Board (IASB). IFRS has been adopted by more than 12,000 organisations in over 100 countries and is becoming the global standard for the preparation of financial statements of public companies throughout the world. However, …

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Relevant Costs – Meaning and Pitfalls

Relevant costs are those expected future costs which vary under various alternatives. Let’s take an example, in the case of whether to retain or replace an old machine, the realisable value and dismantling cost of the old machine are relevant costs but the present written down value (WDV) of the …

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Flaws in Traditional Costing System

There are two flaws in traditional costing. One is that, in traditional costing, the selling price of a product depends solely on the costs. The problem with such method of pricing is that the customers may not find the resulting price acceptable. Also, the competitors may have lower prices or …

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