What is the underlying principle of ASU 2014-09, 'Revenue from Contracts with Customers'?
Understand the Problem
The question asks about the core principle behind ASU 2014-09, which is the accounting standards update on revenue recognition from contracts with customers. The options provide different approaches to revenue recognition, and the task is to identify the one that aligns with the standard's fundamental concept.
Answer
ASU 2014-09 aims to provide useful information on revenue from contracts, recognizing revenue when control of goods/services transfers to the customer.
The underlying principle of ASU 2014-09, "Revenue from Contracts with Customers," is to report useful information to financial statement users about the nature, timing, and uncertainty of revenue from contracts with customers. It aims to recognize revenue when control of goods or services transfers.
Answer for screen readers
The underlying principle of ASU 2014-09, "Revenue from Contracts with Customers," is to report useful information to financial statement users about the nature, timing, and uncertainty of revenue from contracts with customers. It aims to recognize revenue when control of goods or services transfers.
More Information
ASU 2014-09 replaces almost all pre-existing revenue recognition guidance under U.S. GAAP with a uniform model.
Tips
Understanding when control transfers is key to applying this standard correctly.
Sources
AI-generated content may contain errors. Please verify critical information
