Why Is It Difficult to Compare IAS 18, Revenue, to U.S.GAAP

question 34

Multiple Choice

Why is it difficult to compare IAS 18, Revenue, to U.S.GAAP?

• A)The IASB definition of revenue is very complicated, whereas the definition of revenue under U.S.GAAP is straightforward.
• B)Revenue is not defined under U.S.GAAP.
• C)There is no single standard in U.S.GAAP that deals solely with revenue.
• D)Under U.S.GAAP, revenue is defined in terms of cash, whereas IAS 18 defines revenue in terms of a variety of resources.

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Definitions:

Unearned Revenue

Money received by a company for a product or service that has yet to be delivered or performed.

Retainer Fee

A prepaid fee charged by professionals to clients to secure their services for a specified period.

Legal Representation

The act of having a lawyer or attorney act on behalf of an individual or entity in legal matters.

Prepaid Expense

Prepaid Expense represents payments made in advance for goods or services to be received in the future, recognized as an asset until the benefit is consumed.