Page 11 - FINAL CFA I SLIDES JUNE 2019 DAY 7

Session Unit 7:
24. Understanding Income Statements

LOS 24.d: Describe key aspects of the converged accounting standards for revenue

recognition issued by the IASB and FASB in May 2014.

5-step process is principles-based:
1. Identify the contract(s) with a customer.

2. Identify the performance obligations in the contract.
tanties
3. Determine the transaction price.

4. Allocate the transaction price to the performance obligations in the contract.
5. Recognize revenue when (or as) the entity satisfies a performance obligation.

Required disclosures under the converged standards include:

1. Contracts with customers by category.

2. Assets and liabilities related to contracts, including balances and changes.
3. Outstanding performance obligations and the transaction prices allocated to them.

4. Management judgments used to determine the amount and timing of revenue

recognition, including any changes to those judgments.
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Lets turn now to Expense Recognition!