Where are we with long-term contract accounting?

Robert K. Larson
Karen L. Brown, Missouri State University


Synopsis: In response to practices by major U.S. corporations, the SEC and the FASB initiated major revenue recognition projects. This commentary examines the accounting for long-term contracts, an aspect of revenue recognition often overlooked in academic research. The exploratory study reported here describes current practices and disclosures about long-term contracts by Fortune 500 corporations, examines the level of comparability in these disclosures, and provides explanations for current practices.