An end to the uncertainty?

摘要

When published by the Accounting Standards Board (ASB), Application Note G (known as AN G) created uncertainty among professional firms, because some commentators believed it required them to accelerate income recognition on short-term contracts. This would result in partners paying tax on income that they had not yet received. Recognising this risk, many managing partners set about reducing levels of work in progress and maximising billing. Even in the absence of AN G, this made sound commercial sense. On 10 March 2005, the ASB's Urgent Issues Task Force issued Abstract 40, which redefines UK Generally Accepted Accounting Practice for revenue recognition of service contracts. This is to be welcomed, although some uncertainties remain.