GAAP
A) requires that revenue not be recognized until cash is received.
B) allows revenue to be recognized when a customer makes an order.
C) provides only general guidance on revenue recognition, compared to the detailed guidance provided by IFRS.
D) provides the same type of guidance as IFRS for revenue recognition.

Question

GAAP 
A) requires that revenue not be recognized until cash is received.
B) allows revenue to be recognized when a customer makes an order.
C) provides only general guidance on revenue recognition, compared to the detailed guidance provided by IFRS.
D) provides the same type of guidance as IFRS for revenue recognition.

Quizplus · Accepted Answer

GAAP and IFRS have converged on most aspects of revenue recognition guidance in recent years, resulting in greater consistency between the two frameworks. Therefore, GAAP provides the same type of guidance as IFRS for revenue recognition. Option A and B are incorrect as they provide incorrect information. Option C is incorrect as IFRS and GAAP now have very similar guidelines for revenue recognition, and in some cases, GAAP provides more detailed guidance than its international counterpart.