Larson industries: A case on identifying and researching revenue recognition issues

Casey J. McNellis, Gerhard J. Barone, Joshua Herbold

Research output: Contribution to journalArticle

Abstract

Financial accounting students are often provided cues regarding a particular recognition/measurement issue prior to learning the related technical material. Yet, anecdotal evidence from the profession suggests that the identification and framing of complex issues is a necessary skill for emerging professionals. This case provides accounting students a hypothetical scenario that requires them to identify several financial reporting issues, research the relevant authoritative guidance, and arrive at conclusions regarding the appropriate reporting treatment. The recent implementation of the updated revenue recognition guidance per Topic 606 from the Financial Accounting Standards Board’s Accounting Standards Codificationt and IFRS 15 from the International Accounting Standards Board provides a current and relevant setting for this issue identification and evaluation exercise. Results from graduate-level courses at two universities indicate that students perceived great benefits in (1) identifying and framing revenue recognition issues without textbook cues and (2) learning the new authoritative guidance.

Original languageEnglish (US)
Pages (from-to)65-75
Number of pages11
JournalIssues in Accounting Education
Volume35
Issue number2
DOIs
StatePublished - 2020

Keywords

  • FASB Codification
  • IFRS
  • Professional research
  • Revenue recognition

ASJC Scopus subject areas

  • Accounting
  • Education

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