What are the basic differences between the revenue realizationprinciple and revenue from the contract...

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Accounting

What are the basic differences between the revenue realizationprinciple and revenue from the contract with customers (ASC 606)?Do you think ASC 606 is better than the realization principle? Why?Give your reasons.

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Revenue realisation principle is a generally accepted accounting principle GAAP that determines the specific conditions in which revenue is recognized or accounted for Generally revenue is recognized only when a critical event has occurred and the amount of revenue is measurable However there are several situations in which exceptions may apply The revenue recognition principle a combination of accrual accounting and the matching principle stipulates that revenues are recognized when realized and earned not necessarily when received Realizable means that goods andor services have been received but payment for the product or service is expected later Earned revenue accounts for goods andor services that have been provided or performed respectively In addition the revenue generating activity must be fully or primarily complete to include its revenue during the respective accounting period and there must be a reasonable level of certainty that earned revenue will be received Lastly according to the matching principle the revenue and its associated costs must be reported in the same accounting period On May 28 2014 the Financial Accounting Standards Board FASB and International Accounting Standards Board IASB jointly issued Accounting Standards Codification ASC 606 regarding revenue from contracts with customers ASC 606 provides a uniform framework for recognizing revenue from contracts with customers The old guidance was based on industryspecific guidance which created a system of fragmented See Answer

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In: AccountingWhat are the basic differences between the revenue realizationprinciple and revenue from the contract with...What are the basic differences between the revenue realizationprinciple and revenue from the contract with customers (ASC 606)?Do you think ASC 606 is better than the realization principle? Why?Give your reasons.