What is EITF 00 21?
EITF 00-21 affects revenue recognition in a number of industries with contracts similar in nature to those of Viisage. The new rule now requires companies to separate components of a complex contract into separate units of accounting. For example, building a system is accounted for differently than managing a system.
What is Eitf?
The Emerging Issues Task Force (EITF) is an organization formed by the Financial Accounting Standards Board (FASB) in 1984 to identify, discuss and resolve financial accounting issues with an aim to improve financial reporting.
What is EITF 08 1?
FASB recently issued EITF Issue Number 08-1, which modifies the way companies with multiple deliverable arrangements will report revenue. The most significant change is the introduction of Relative Selling Price which replaces the old requirement to establish objective evidence of fair value.
What is an arrangement with multiple deliverables?
Arrangements between vendors and their customers often include the sale of multiple products and services (deliverables). A “multiple deliverable arrangement [MDA]” can be structured using fixed, variable, or contingent pricing or combinations thereof.
Is Eitf part of FASB?
The EITF was created by the Financial Accounting Standards Board (FASB) in 1984. The organization is responsible for developing and implementing a streamlined set of accounting principles in order to prevent different practices from becoming accepted.
What does the APB do?
The purpose of the APB was to issue guidelines and rules on accounting principles. Some of the opinions released by the APB still stand as part of the Generally Accepted Accounting Principles (GAAP), but most have been either amended or entirely superseded by FASB statements.
What is a multi element arrangement?
Revenues from contracts with multiple element arrangements are recognized as each element is earned based on the relative fair value of each element provided the delivered elements have value to customers on a standalone basis. Long-term contracts are accounted for using the percentage of completion method.
What is revenue arrangement?
Revenue Arrangements are containers for Revenue Elements (performance obligations). Revenue Elements can be merged across linked orders or contracts, or split into multiple Arrangements, to accurately represent the revenue contract regardless of how the revenue source transactions are managed and billed.
Does a consensus of the EITF have the same power of GAAP as an FASB Statement?
An EITF Issue is just as valid as a FASB pronouncement and is included in generally accepted accounting principles.
What is the difference between FASB and APB?
The major distinction between the Financial Accounting Standards Board (FASB) and its predecessor, the Accounting Principles Board (APB), is: A) the FASB issues exposure drafts of proposed standards. B) all members of the FASB are fully remunerated, serve full time, and are independent of any companies or institutions.