Quiz: How Prepared Are You for the New Revenue Recognition Standards?

  • by Gaurav Aggarwal, Lead Consultant, SAP S/4HANA Finance, Infosys Limited
  • February 1, 2016
So you think your organization is ready for the new revenue recognition standards? They are scheduled to take effect for all annual periods beginning on or after January, 1, 2018, for International Financial Reporting Standards (IFRS) preparers. Review 10 questions and answers on revenue recognition. This primer will help you determine if you really are ready for the revenue recognition standards.
Key Concept
IFRS 15 is a new revenue recognition standard issued by the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) on May 28, 2014.

According to the article “Realize Special Requirements for Revenue Recognition,” “SAP provides certain predefined methods for calculating revenue and cost. However, you may have some specific business needs to meet for determining the revenue recognition based on the principles defined in International Financial Reporting Standards (IFRS). For example, an organization is doing the work for a client for a month, but the billing is done in the next month, so the matching of revenue and cost for the same period is important.”

In some business scenarios, such as enhancing the completed contract method or enhancing the cost-based percentage of completion (POC) method, you need to handle special needs for determining revenue not met by standard SAP functionality. To help you prepare for these types of scenarios and to gain an understanding of how to determine the revenue recognition based on the principles defined in IFRS, I prepared a quiz for you to take. The answers are listed at the end of this article.

Gaurav Aggarwal

Gaurav Aggarwal is SAP S/4HANA lead consultant at Infosys Limited. He has more than 14 years of experience, including 11 years in SAP Finance. He has expertise in both SAP FI and Controlling (CO) with integration to other modules in manufacturing and process industries. He is a chartered accountant and SAP Certified Financial Consultant. He holds a bachelor’s degree in commerce and is a techno-functional expert with thorough knowledge of the necessary ABAP for functional experts. He is a veteran in G/L, AR, AP, banking, FA, Travel Management, and closing cockpit and has handled greenfield implementation, upgrades and conversions, rollouts, and support projects. 

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