Question:
Briefly describe how IFRS guidelines for recognizing revenue from multiple-deliverable arrangements
differ from U.S. GAAP guidelines.
Answer:
IFRS has less specific guidance for recognizing revenue for multiple-deliverable arrangements. IAS No.
18 simply states that: “…in certain circumstances, it is necessary to apply the recognition criteria to the
separately identifiable components of a single transaction in order to reflect the substance of the
transaction” and gives a couple of examples, whereas U.S. GAAP provides more restrictive guidance
concerning how to allocate revenue to various components and when revenue from components can be
recognized.
Briefly describe how IFRS guidelines for recognizing revenue from multiple-deliverable arrangements
differ from U.S. GAAP guidelines.
Answer:
IFRS has less specific guidance for recognizing revenue for multiple-deliverable arrangements. IAS No.
18 simply states that: “…in certain circumstances, it is necessary to apply the recognition criteria to the
separately identifiable components of a single transaction in order to reflect the substance of the
transaction” and gives a couple of examples, whereas U.S. GAAP provides more restrictive guidance
concerning how to allocate revenue to various components and when revenue from components can be
recognized.
