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The_Importance_of_Timing_of_Revenue_Recognition.docx The Importance of the Timing of Re
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The_Importance_of_Timing_of_Revenue_Recognition.docx The Importance of the Timing of Revenue in the Construction Industry College of Business, Western Governors University The Importance of the T... iming of Revenue in the Construction Industry Revenue is a key indicator of financial health and sustainability for any organization in all industries. It is a highly important number to an organizations investors and financial statement users. These stakeholders rely on correctly reported information about the businesses success (or lack thereof), which they can compare to other industry examples and perform analysis to help make informed business decisions. Because of this, it is extremely important to ensure revenue is recorded correctly according to Generally Accepted Accounting Principles (GAAP), which guarantees real-time reporting of an organizations profit and loss margins and maintains credibility for the organizations finances (Botkeeper, 2021). The timing of revenue recognition can change the story told by the numbers and skew key indicators of performance. If it is not matched to the correct expenses in the correct period, users of the financial information may draw the wrong conclusions. Because of revenues importance, “Current U.S. GAAP standards related to revenue recognition are essentially rules-based, containing over 200 specific requirements related to revenue recognition (Bloom & Kamm, 2014). Financial Accounting Standards Board (FASB) concept No. 5 explains that companies meet the two conditions for recogni. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. .. . . . . . . . . . . . . . . . . . .. . . . . [Show More]
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