Home » Articles » Lexis Nexus Complexus: Comparative Contract Law and International Accounting Collide in the IASB––FASB Revenue Recognition Exposure Draft

Lexis Nexus Complexus: Comparative Contract Law and International Accounting Collide in the IASB––FASB Revenue Recognition Exposure Draft

PDF · Kurt S. Schulzke, Gerlinde Berger-Walliser, Pier Luigi Marchini · Apr-11-2013 · 46 VAND. J. TRANSNAT’L L. 515 (2013)

U.S. and international accounting-standard setters plan to launch a new, global revenue accounting standard, Revenue from Contracts with Customers, in 2013. Poised at the nexus of comparative contract law and international accounting, the proposal’’s contract-based revenue recognition model creates new legal risks and opportunities for accountants, lawyers, clients, and financial statement users. Despite its focus on legally enforceable contracts, the proposed standard was drafted without input from the legal community. This Article models the proposal’’s complex contract-analysis process, demonstrating that its revenue outcomes may vary materially because of seemingly minor interjurisdictional differences in law applicable to ““open-price”” contracts; offers practice pointers for attorneys, accountants, and auditors; recommends changes to the proposal, including the substitution of self-enforcing Nash equilibria for legally enforceable contracts; and encourages more collaboration between the legal and accounting professions in the joint deployment of legal and accounting expertise for better value creation, value allocation, and risk mitigation.

 




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We are pleased to announce the 2013-2014 VJTL New Members

Coming up:

The Vanderbilt Journal of Transnational Law hosted a symposium called “The Role of Non-State Actors in International Law” at Vanderbilt University Law School in February 2013.

The October issue of the Journal will showcase articles by distinguished symposium guests including:

  • Mr. Ian Smillie, “Blood Diamonds and Non-State Actors”
  • Professor Jean d’Aspremont, “Cognitive Conflicts and the Making of International Law from Empirical Concord to Conceptual Discord in Legal Scholarship”
  • Professor Peter J. Spiro, “Constraining Global Corporate Power: A Very Short Introduction”
  • Professor Suzanne Katzenstein
  • Professor Peter Margulies
  • Professor Harlan G. Cohen

 

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